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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of Earliest Event Reported): May 19, 1995
U.S. BIOSCIENCE, INC.
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(Exact Name of Registrant as Specified in its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
1-10392 23-2460100
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(Commission File Number) (I.R.S. Employer
Identification No.)
One Tower Bridge
100 Front Street
Westt Conshohocken, Pennsylvania 19428
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(Address of Principal Executive Offices) (Zip Code)
(215) 832-0570
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(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events
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Adoption of Stockholder Rights Plan
-----------------------------------
On May 19, 1995, the Board of Directors of the Company declared a
dividend of one Preferred Stock Purchase Right (the "Right(s)") for each
outstanding share of Common Stock, par value $0.005 per share (the "Common
Stock"), of the Company. The dividend is payable as of May 29, 1995 to
stockholders of record on that date. Each Right entitles the registered
holder to purchase from the Company one one-hundredth (1/100) of a share of
a new series of preferred shares of the Company, designated as Series A
Junior Preferred Stock ("Preferred Stock"), at a price of $15 per one
one-hundredth (1/100) of a share (the "Exercise Price"), subject to certain
adjustments. The description and terms of the Rights are set forth in a
Rights Agreement, dated as of May 19, 1995, (the "Rights Agreement"), between
the Company and Chemical Mellon Shareholder Services L.L.C., as Rights
Agent ("Rights Agent").
Initially the Rights will not be exercisable, certificates will
not be sent to stockholders, and the Rights will automatically trade with
the Common Stock.
The Rights, unless earlier redeemed by the Board of Directors,
become exercisable upon the close of business on the day (the "Distribution
Date") which is the earlier of (i) the tenth day following a public
announcement that a person or group of affiliated or associated persons,
with certain exceptions set forth below, has acquired beneficial ownership
of 15% or more of the outstanding voting stock of the Company (an
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"Acquiring Person") and (ii) the tenth business day (or such later date as
may be determined by the Board of Directors prior to such time as any
person or group of affiliated or associated persons becomes an Acquiring
Person) after the date of the commencement or announcement of a person's or
group's intention to commence a tender or exchange offer the consummation
of which would result in the ownership of 30% or more of the Company's
outstanding voting stock (even if no shares are actually purchased pursuant
to such offer); prior thereto, the Rights would not be exercisable, would
not be represented by a separate certificate, and would not be transferable
apart from the Company's Common Stock, but will instead be evidenced, with
respect to any of the Common Stock certificates outstanding as of May 29,
1995, by such Common Stock certificate with a copy of this Summary of
Rights attached thereto. An Acquiring Person does not include (A) the
Company, (B) any subsidiary of the Company, (C) any employee benefit plan
or employee stock plan of the Company or of any subsidiary of the Company,
or any trust or other entity organized, appointed, established or holding
Common Stock for or pursuant to the terms of any such plan or (D) any
person or group whose ownership of 15% or more of the shares of voting
stock of the Company then outstanding results solely from (i) any action or
transaction or transactions approved by the Board of Directors before such
person or group became an Acquiring Person or (ii) a reduction in the
number of issued and outstanding shares of voting stock of the Company
pursuant to a transaction or transactions approved by the Board of
Directors (provided that any person or group that does not become an
Acquiring Person by reason of clause (i) or (ii) above shall become an
Acquiring Person upon acquisition of an additional 1% of the Company's
voting stock unless such acquisition of additional voting stock will not
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result in such person or group becoming an Acquiring Person by reason of
such clause (i) or (ii)).
Until the Distribution Date (or earlier redemption or expiration
of the Rights), new Common Stock certificates issued after May 29, 1995
will contain a legend incorporating the Rights Agreement by reference.
Until the Distribution Date (or earlier redemption or expiration of the
Rights), the surrender for transfer of any of the Company's Common Stock
certificates outstanding as of May 29, 1995 with or without a copy of the
Summary of Rights attached, will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate. As soon
as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of
record of the Company's Common Stock as of the close of business on the
Distribution Date and such separate certificates alone will evidence the
Rights from and after the Distribution Date.
The Rights are not exercisable until the Distribution Date. The
Rights will expire at the close of business on May 19, 2005, unless earlier
redeemed by the Company as described below.
The Preferred Stock is non-redeemable and, unless otherwise
provided in connection with the creation of a subsequent series of
preferred stock, subordinate to any other series of the Company's preferred
stock. The Preferred Stock may not be issued except upon exercise of
Rights. Each share of Preferred Stock will be entitled to receive when, as
and if declared, a quarterly dividend in an amount equal to the greater of
$1.00 per share and 100 times the cash dividends declared on the Company's
Common Stock. In addition, the Preferred Stock is entitled to 100 times
any non-cash dividends (other than dividends payable in equity securities)
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declared on the Common Stock, in like kind. In the event of liquidation,
the holders of Preferred Stock will be entitled to receive for each share
of Series A Preferred Stock, a liquidation payment in an amount equal to
the greater of $1,500 or 100 times the payment made per share of Common
Stock. Each share of Preferred Stock will have 100 votes, voting together
with the Common Stock. In the event of any merger, consolidation or other
transaction in which Common Stock is exchanged, each share of Preferred
Stock will be entitled to receive 100 times the amount received per share
of Common Stock. The rights of Preferred Stock as to dividends,
liquidation and voting are protected by anti-dilution provisions.
The number of shares of Preferred Stock issuable upon exercise of
the Rights is subject to certain adjustments from time to time in the event
of a stock dividend on, or a subdivision or combination of, the Common
Stock. The Exercise Price for the Rights is subject to adjustment in the
event of extraordinary distributions of cash or other property to holders
of Common Stock.
Unless the Rights are earlier redeemed or the transaction is
approved by the Board of Directors and the Continuing Directors, in the
event that, after the time that the Rights become exercisable, the Company
were to be acquired in a merger or other business combination (in which any
shares of the Company's Common Stock are changed into or exchanged for
other securities or assets) or more than 50% of the assets or earning power
of the Company and its subsidiaries (taken as a whole) were to be sold or
transferred in one or a series of related transactions, the Rights
Agreement provides that proper provision will be made so that each holder
of record of a Right will from and after such date have the right to
receive, upon payment of the Exercise Price, that number of shares of
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common stock of the acquiring company having a market value at the time of
such transaction equal to two times the Exercise Price. In addition,
unless the Rights are earlier redeemed, if a person or group (with certain
exceptions) becomes the beneficial owner of 15% or more of the Company's
voting stock (other than pursuant to a tender or exchange offer (a
"Qualifying Tender Offer") for all outstanding shares of Common Stock that
is approved by the Board of Directors, after taking into account the long-
term value of the Company and all other factors they consider relevant in
the circumstances), the Rights Agreement provides that proper provision
will be made so that each holder of record of a Right, other than the
Acquiring Person (whose Rights will thereupon become null and void), will
thereafter have the right to receive, upon payment of the Exercise Price,
that number of shares of the Company's Preferred Stock having a market
value at the time of the transaction equal to two times the Exercise Price
(such market value to be determined with reference to the market value of
the Company's Common Stock as provided in the Rights Agreement).
Fractions of shares of Preferred Stock (other than fractions that
are integral multiples of one one-hundredth (1/100) of a share) may, at the
election of the Company, be evidenced by depositary receipts. The Company
may also issue cash in lieu of fractional shares which are not integral
multiples of one one-hundredth (1/100) of a share.
At any time on or prior to the close of business on the tenth day
after the time that a person has become an Acquiring Person (or such later
date as a majority of the Board of Directors and a majority of the
Continuing Directors (as defined in the Rights Agreement) may determine),
the Company may redeem the Rights in whole, but not in part, at a price of
$.001 per Right ("Redemption Price"). The Rights may be redeemed after the
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time that any Person has become an Acquiring Person only if approved by a
majority of the Continuing Directors. Immediately upon the effective time
of the action of the Board of Directors of the Company authorizing
redemption of the Rights, the right to exercise the Rights will terminate
and the only right of the holders of the Rights will be to receive the
Redemption Price.
For as long as the Rights are then redeemable, the Company may,
except with respect to the redemption price or date of expiration of the
Rights, amend the Rights in any manner, including an amendment to extend
the time period in which the Rights may be redeemed. At any time when the
Rights are not then redeemable, the Company may amend the Rights in any
manner that does not materially adversely affect the interests of holders
of the Rights as such. Amendments to the Rights Agreement from and after
the time that any Person becomes an Acquiring Person requires the approval
of a majority of the Continuing Directors (as provided in the Rights
Agreement).
Until a Right is exercised, the holder, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
As of March 15, 1995 there were 40,770,780 shares of Common Stock
issued and outstanding (and 7,341,342 and 1,096,634 shares reserved for
issuance under the Company's existing stock option plans and warrants,
respectively). 500,000 shares of Preferred Stock have been reserved for
issuance upon exercise of the Rights.
The Rights have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group who attempts to acquire the
Company on terms not approved by the Company's Board of Directors. The
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Rights should not interfere with any merger or other business combination
approved by the Board since they may be redeemed by the Company at $.01 per
Right at any time until the close of business on the tenth day (or such
later date as described above) after a person or group has obtained
beneficial ownership of 15% or more of the voting stock.
The form of Rights Agreement between the Company and Chemical
Mellon Shareholder Services, L.L.C., as rights agent, specifying the terms
of the Rights, which includes as Exhibit A the form of Summary of Rights to
Purchase Series A Junior Preferred Stock, as Exhibit B the form of Right
Certificate and as Exhibit C the form of Certificate of Designations of the
Company setting forth the terms of the Preferred Stock are attached hereto
as exhibits and incorporated herein by reference. The foregoing
description of the Rights is qualified by reference to such exhibits.
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Item 7. Financial Statements, Pro Forma Financial
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Information and Exhibits.
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(c) Exhibits.
1. Rights Agreement dated as of May 19, 1995 between U.S.
Bioscience, Inc. and Chemical Mellon Shareholder Services
L.L.C. as Rights Agent. The Rights Agreement includes as
Exhibit B the form of Right Certificate and as Exhibit C the
form of Certificate of Designations.
2. Press Release, dated May 19, 1995.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
U.S. BIOSCIENCE, INC.
By: /s/ Robert I. Kriebel
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Name: Robert I. Kriebel
Title: Senior Vice President
June 7, 1995<PAGE>
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EXHIBIT INDEX
Exhibit No. Description Page
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1. Rights Agreement dated as of May 19, 1995 between U.S.
Bioscience, Inc. and Chemical Mellon Shareholder
Services L.L.C. as Rights Agent. The Rights Agreement
includes as Exhibit B the form of Right Certificate and
as Exhibit C the form of Certificate of Designations.
2. Press Release, dated May 19, 1995.
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=============================================================================
RIGHTS AGREEMENT
by and between
U.S. BIOSCIENCE, INC.
and
CHEMICAL MELLON SHAREHOLDER SERVICES L.L.C.
as Rights Agent
_______________
Dated as of
May 19, 1995
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TABLE OF CONTENTS
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Section Page
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1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . 2
2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . 14
3. Issuance of Right Certificates . . . . . . . . . . . . . . . 14
4. Form of Right Certificates . . . . . . . . . . . . . . . . . 18
5. Countersignature and Registration . . . . . . . . . . . . . . 19
6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates . . . . . . . . . . . . . . . . . . . . . . . . 20
7. Exercise of Rights; Exercise Price; Expiration Date of Rights 22
8. Cancellation and Destruction of Right Certificates . . . . . 27
9. Reservation and Availability of Shares of Preferred Stock . . 28
10. Preferred Stock Record Date . . . . . . . . . . . . . . . . . 31
11. Adjustment of Exercise Price or Number of Shares . . . . . . 31
12. Certification of Adjusted Exercise Price or Number of
Shares . . . . . . . . . . . . . . . . . . . . . . . . . 41
13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power . . . . . . . . . . . . . . . . . . . . . . 42
14. Fractional Rights and Fractional Shares . . . . . . . . . . . 50
15. Rights of Action . . . . . . . . . . . . . . . . . . . . . . 51
16. Agreement of Right Holders . . . . . . . . . . . . . . . . . 52
17. Right Certificate Holder Not Deemed a Stockholder . . . . . . 53
18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . 54
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Section Page
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19. Merger or Consolidation of, or Change in Name of, the
Rights Agent . . . . . . . . . . . . . . . . . . . . . . 55
20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . 57
21. Change of Rights Agent . . . . . . . . . . . . . . . . . . . 60
22. Issuance of New Right Certificates . . . . . . . . . . . . . 62
23. Redemption . . . . . . . . . . . . . . . . . . . . . . . . . 63
24. Notice of Proposed Actions . . . . . . . . . . . . . . . . . 65
25. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
26. Supplements and Amendments . . . . . . . . . . . . . . . . . 68
27. Successors . . . . . . . . . . . . . . . . . . . . . . . . . 70
28. Benefits of this Rights Agreement . . . . . . . . . . . . . . 70
29. Delaware Contract . . . . . . . . . . . . . . . . . . . . . . 70
30. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 70
31. Descriptive Headings . . . . . . . . . . . . . . . . . . . . 71
32. Severability . . . . . . . . . . . . . . . . . . . . . . . . 71
Exhibit A -- Summary of Rights
Exhibit B -- Form of Right Certificate
Exhibit C -- Form of Certificate of Designations of
Series A Junior Preferred Stock
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RIGHTS AGREEMENT
Agreement, dated as of May 19, 1995, by and between U.S.
BIOSCIENCE, INC., a Delaware corporation (the "Company"), and Chemical
Mellon Shareholder Services L.L.C., a New Jersey Limited Liability
Company (the "Rights Agent").
W I T N E S S E T H :
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WHEREAS, on May 19, 1995, the Board of Directors of the
Company authorized the issuance of, and declared a dividend payable
in, one right (a "Right") for each share of Common Stock, $0.005 par
value per share, of the Company outstanding as of the close of
business on May 29, 1995 (the "Record Date"), each such Right
representing the right to purchase one one-hundredth of a share of
Series A Junior Preferred Stock of the Company ("Preferred Stock")
having the rights and preferences set forth in the form of Certificate
of Designations attached hereto as Exhibit C authorized by the Board
of Directors on May 19, 1995, upon the terms and subject to the
conditions hereinafter set forth; and
WHEREAS, the Board of Directors of the Company further
authorized the issuance of one Right (subject to adjustment) with
respect to each share of Common Stock which may be issued between the
Record Date and the earlier to occur of the Expiration Date
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or the Final Expiration Date (as such terms are hereinafter defined);
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
Section 1. Certain Definitions. For purposes of this
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Agreement, the following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such
term is hereinafter defined) who or which, together with all
Affiliates (as such term is hereinafter defined) and
Associates (as such term is hereinafter defined) of such
Person, shall be the Beneficial Owner (as such term is
hereinafter defined) of 15% or more of the Voting Stock of
the Company then outstanding; provided, that, an Acquiring
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Person shall not include (i) an Exempt Person (as such term
is hereinafter defined) or (ii) any Person, together with
all Affiliates and Associates of such Person, who or which
would be an Acquiring Person solely by reason of (A) being
the Beneficial Owner of shares of Voting Stock of the
Company, the Beneficial Ownership of which was acquired by
such Person pursuant to any action or transaction or series
of related actions or transactions approved by the Board of
Directors before such
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Person otherwise became an Acquiring Person or (B) a
reduction in the number of issued and outstanding shares of
Voting Stock of the Company pursuant to a transaction or a
series of related transactions approved by the Board of
Directors of the Company; provided, further, that in the
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event such Person described in this clause (ii) does not
become an Acquiring Person by reason of subclause (A) or (B)
of this clause (ii), such Person nonetheless shall become an
Acquiring Person in the event such Person thereafter
acquires Beneficial Ownership of an additional 1% of the
Voting Stock of the Company, unless the acquisition of such
additional Voting Stock would not result in such Person
becoming an Acquiring Person by reason of subclause (A) or
(B) of this clause (ii). Notwithstanding the foregoing, if
the Board of Directors of the Company determines in good
faith (but only if at the time of such determination by the
Board of Directors there are then in office not less than
two Continuing Directors and such action is approved by a
majority of the Continuing Directors then in office) that a
Person who would otherwise be an "Acquiring Person" as
defined pursuant to the foregoing provisions of this
paragraph (a) has become such inadvertently, and such Person
divests as
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promptly as practicable a sufficient number of shares of
Common Stock so that such Person would no longer be an
"Acquiring Person" as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not
be deemed an "Acquiring Person" for any purposes of this
Rights Agreement.
(b) "Affiliate" shall have the meaning ascribed to
such term in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended
("Exchange Act"), as in effect on the date of this Rights
Agreement.
(c) "Associate" of a Person (as such term is
hereinafter defined) shall mean (i) with respect to a
corporation, any officer or director thereof or of any
Subsidiary (as such term is hereinafter defined) thereof, or
any Beneficial Owner (as such term is hereinafter defined)
of 10% or more of any class of equity security thereof, (ii)
with respect to an association, any officer or director
thereof or of a Subsidiary thereof, (iii) with respect to a
partnership, any general partner thereof or any limited
partner thereof who is, directly or indirectly, the
Beneficial Owner of a 10% ownership interest therein, (iv)
with respect to a business trust, any officer or trustee
thereof or of
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any Subsidiary thereof, (v) with respect to any other trust
or an estate, any trustee, executor or similar fiduciary or
any Person who has a 15% or greater interest as a
beneficiary in the income from or principal of such trust or
estate, (vi) with respect to a natural person, any relative
or spouse of such person, or any relative of such spouse,
who has the same home as such person, and (vii) any
Affiliate of such Person.
(d) A person shall be deemed the "Beneficial Owner"
of, or to "Beneficially Own", any securities (and
correlative terms shall have correlative meanings):
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly, for purposes of Section 13(d) of the
Exchange Act and Regulations 13D and 13G thereunder (or
any comparable or successor law or regulation), in each
case as in effect on the date hereof; or
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire
(whether such right is exercisable immediately or only
after the passage of time or the fulfillment of a
condition or both) pursu-
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ant to any agreement, arrangement or understanding, or
upon the exercise of conversion rights, exchange
rights, other rights (other than these Rights),
warrants or options, or otherwise; provided, however,
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that a Person shall not be deemed the "Beneficial
Owner" of, or to "Beneficially Own", securities
tendered pursuant to a tender or exchange offer made by
such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted
for purchase or exchange or (B) the right to vote,
alone or in concert with others, pursuant to any
agreement, arrangement or understanding (whether or not
in writing); provided, however, that a Person shall not
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be deemed the "Beneficial Owner" of, or to
"Beneficially Own", any securities if the agreement,
arrangement or understanding to vote such security (1)
arises solely from a revocable proxy or consent given
in response to a proxy or consent solicitation made
pursuant to, and in accordance with, the applicable
rules and regulations under the Exchange Act and (2) is
not at the time reportable by such Person on a Schedule
13D report under the Exchange Act (or any comparable or
suc
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cessor report), other than by reference to a proxy or
consent solicitation being conducted by such Person; or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person
or any of such Person's Affiliates or Associates has
any agreement, arrangement or understanding (whether or
not in writing) for the purpose of acquiring, holding,
voting (except as described in clause (B) of
subparagraph (ii) of this paragraph (d)) or disposing
of any securities of the Company; provided, however,
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that for purposes of determining Beneficial Ownership
of securities under this Rights Agreement, officers and
directors of the Company solely by reason of their
status as such shall not constitute a group
(notwithstanding that they may be Associates of one
another or may be deemed to constitute a group for
purposes of Section 13(d) the Exchange Act) and shall
not be deemed to own shares owned by another officer or
director of the Company.
Notwithstanding anything in this paragraph (d) to the
contrary, a Person shall not be deemed the "Beneficial
Owner" of, or to "Beneficially Own," any
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security beneficially owned by another Person solely by
reason of an agreement, arrangement or understanding with
such other Person for the purposes of: (x) soliciting the
Company's stockholders for the election of director nominees
or any other stockholder resolution, the formation of and
membership on any committee for the purpose of promoting or
opposing any stockholder resolution or for electing a slate
of nominees to the Company's Board of Directors, service on
such a slate of nominees, or agreement to a slate of direc-
tor nominees, provided, that such other Person retains the
--------
right at any time to withdraw as a nominee or member of any
such committee, and to withhold or revoke any vote or proxy
for or against any such stockholder resolution or for such
slate of nominees; (y) entering into revocable voting
agreements or the granting or solicitation of revocable
proxies with respect to any of the matters described in the
foregoing clause (x); or (z) the sharing of expenses and the
indemnification against expenses and liabilities by any such
other Person with respect to expenses incurred or conduct
occurring during the time such other Person is a nominee or
a member of any such committee described in the foregoing
clause (x). Further, notwithstanding
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anything in this paragraph (d) to the contrary, a Person
engaged in the business of underwriting securities shall not
be deemed the "Beneficial Owner" of, or to "Beneficially
Own," any securities acquired in good faith in a firm
commitment underwriting until the expiration of forty days
after the date of such acquisition.
(e) "Business Day" shall mean any day other than a
Saturday, Sunday, or a day on which banking institutions in
the State of Pennsylvania are authorized or obligated by law
or executive order to close.
(f) "Close of Business" on any given date shall mean
5:00 P.M., Pennsylvania time, on such date; provided,
--------
however, that if such date is not a Business Day it shall
-------
mean 5:00 P.M., Pennsylvania time, on the next succeeding
Business Day.
(g) "Common Stock" when used with reference to the
Company shall collectively mean the Common Stock, $0.005 par
value, of the Company. "Common Stock" when used with
reference to any Person other than the Company which shall
be organized in corporate form shall mean the capital stock
or other equity security with the greatest per share voting
power of such Person. "Common Stock" when used with
reference to any
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Person other than the Company which shall not be organized
in corporate form shall mean units of beneficial interest
which shall represent the right to participate in profits,
losses, deductions and credits of such Person and which
shall be entitled to exercise the greatest voting power per
unit of such Person.
(h) "Continuing Director" shall mean any member of the
Board of Directors, while such person is a member of the
Board of Directors, who is not an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, or a
representative or nominee of an Acquiring Person or of any
such Affiliate or Associate, and who either (i) was a member
of the Board of Directors prior to the time that any Person
became an Acquiring Person (other than pursuant to a
Qualifying Tender Offer) or (ii) subsequently became a
member of the Board of Directors, and whose nomination for
election or election to the Board of Directors was recom-
mended or approved by a majority of the Continuing Directors
then on the Board of Directors.
(i) "Distribution Date" shall have the meaning set
forth in Section 3(b) hereof.
(j) "Exchange Act" shall have the meaning set forth in
Section 1(b) hereof.
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(k) "Exempt Person" shall mean (i) the Company, (ii)
any Subsidiary of the Company or (iii) any employee benefit
plan or employee stock plan of the Company or any Subsidiary
of the Company, or any trust or other entity organized,
appointed, established or holding Common Stock for or
pursuant to the terms of any such plan.
(l) "Exercise Price" shall have the meaning set forth
in Sections 4 and 7(b) hereof.
(m) "Expiration Date" shall have the meaning set forth
in Section 7(a) hereof.
(n) "Fair Market Value" of any property shall mean the
fair market value of such property as determined in
accordance with Section 11(b) hereof.
(o) "Final Expiration Date" shall have the meaning set
forth in Section 7(a) hereof.
(p) "Person" shall mean any individual, firm,
corporation or other entity.
(q) "Principal Party" shall have the meaning set forth
in Section 13(b) hereof.
(r) "Qualifying Tender Offer" shall mean a tender or
exchange offer for all outstanding shares of Common Stock of
the Company approved by a majority of the Board of Directors
(provided, that at the time of such
--------
<PAGE>
<PAGE>
approval of the Board of Directors there are then in office
not less than two Continuing Directors and such offer is
approved by a majority of the Continuing Directors then in
office), after taking into account the potential long-term
value of the Company and all other factors that they
consider relevant.
(s) "Redemption Price" shall have the meaning set
forth in Section 23(a) hereof.
(t) "Right Certificate" shall have the meaning set
forth in Section 3(d) hereof.
(u) "Stock Acquisition Date" shall mean the first date
on which there shall be a public announcement by the Company
or an Acquiring Person that an Acquiring Person has become
such (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d)
of the Exchange Act) or such earlier date as a majority of
the Continuing Directors shall become aware of the existence
of an Acquiring Person.
(v) "Subsidiary" of a Person shall mean any
corporation or other entity of which securities or other
ownership interests having voting power sufficient to elect
a majority of the board of directors or other persons
performing similar functions are benefi-
<PAGE>
<PAGE>
cially owned, directly or indirectly, by such Person or by
any corporation or other entity that is otherwise controlled
by such Person.
(w) "Summary of Rights" shall have the meaning set
forth in Section 3(a) hereof.
(x) "Trading Day" shall have the meaning set forth in
Section 11(b) hereof.
(y) "Transfer Tax" shall mean any tax or charge,
including any documentary stamp tax, imposed or collected by
any governmental or regulatory authority in respect of any
transfer of any security, instrument or right, including
Rights, shares of Common Stock and shares of Preferred
Stock.
(z) "Voting Stock" shall mean (i) the Common Stock of
the Company and (ii) any other shares of capital stock of
the Company entitled to vote generally in the election of
directors or entitled to vote together with the Common Stock
in respect of any merger, consolidation, sale of all or
substantially all of the Company's assets, liquidation,
dissolution or winding up. For purposes of this Agreement,
a stated percentage of the Voting Stock shall mean a number
of shares of the Voting Stock as shall equal in voting power
that stated percentage of the total voting power
<PAGE>
<PAGE>
of the then outstanding shares of Voting Stock in the
election of a majority of the Board of Directors or in
respect of any merger, consolidation, sale of all or
substantially all of the Company's assets, liquidation,
dissolution or winding up.
Any determination required to be made by the Board of Directors of the
Company for purposes of applying the definitions contained in this
Section 1 shall be made by the Board of Directors in its good faith
judgment, which determination shall be binding on the Rights Agent and
the holders of the Rights.
Section 2. Appointment of Rights Agent. The Company hereby
---------------------------
appoints the Rights Agent to act as agent for the Company and the
holders of the Rights in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it may
deem necessary or desirable.
Section 3. Issuance of Right Certificates.
------------------------------
(a) On the Record Date (or as soon as practicable there-
after), the Company or the Rights Agent shall send a copy of a Summary
of Rights, in substantially the form attached hereto as Exhibit A (the
"Summary of Rights"), by first class mail, postage prepaid, to each
record holder of the Common Stock as of the close of business on the
Record Date, at the address of such holder shown on the records of the
Company.
<PAGE>
<PAGE>
(b) Until the close of business on the day which is the
earlier of (i) the tenth day after the Stock Acquisition Date or (ii)
the tenth business day (or such later date as may be determined by
action of the Board of Directors prior to such time as any Person
becomes an Acquiring Person) after the date of the commencement by any
Person (other than an Exempt Person) of, or the first public
announcement of the intent of any Person (other than an Exempt Person)
to commence, a tender or exchange offer upon the successful
consummation of which such Person, together with its Affiliates and
Associates, would be the Beneficial Owner of 30% or more of the then
outstanding shares of Voting Stock of the Company (irrespective of
whether any shares are actually purchased pursuant to any such offer)
(the earlier of such dates being herein referred to as the
"Distribution Date"), (x) the Rights shall be evidenced by the
certificates for Common Stock registered in the name of the holders of
Common Stock (together with, in the case of certificates for Common
Stock outstanding as of the Record Date, the Summary of Rights) and
not by separate Right certificates and the record holders of such
certificates for Common Stock shall be the record holders of the
Rights represented thereby and (y) each Right shall be transferable
only simultaneously and together with the transfer of a share of
Common Stock (subject to adjustment as hereinafter provided). Until
the Distribution Date (or, if earlier, the Expiration Date
<PAGE>
<PAGE>
or Final Expiration Date), the surrender for transfer of any
certificate for Common Stock shall constitute the surrender for
transfer of the Right or Rights associated with the Common Stock
evidenced thereby, whether or not accompanied by a copy of the Summary
of Rights.
(c) Rights shall be issued in respect of all shares of
Common Stock that become outstanding after the Record Date but prior
to the earlier of the Distribution Date, the Expiration Date or the
Final Expiration Date and, in certain circumstances provided in
Section 22 hereof, may be issued in respect of shares of Common Stock
that become outstanding after the Distribution Date. Certificates for
Common Stock (including, without limitation, certificates issued upon
original issuance, disposition from the Company's treasury or transfer
or exchange of Common Stock) after the Record Date but prior to the
earliest of the Distribution Date, the Expiration Date, or the Final
Expiration Date (or, in certain circumstances as provided in
Section 22 hereof, after the Distribution Date) shall have impressed,
printed, written or stamped thereon or otherwise affixed thereto the
following legend:
This certificate also evidences and entitles the holder
hereof to the same number of Rights (subject to adjustment)
as the number of shares of Common Stock represented by this
certificate, such Rights being on the terms provided under
the Rights Agreement between U.S. Bioscience, Inc. and
Chemical Mellon Shareholder Services L.L.C. (the "Rights
Agent"), dated as of May 19, 1995, as it may be amended from
time to time (the
<PAGE>
<PAGE>
"Rights Agreement"), the terms of which are incorporated herein
by reference and a copy of which is on file at the principal
executive offices of U.S. Bioscience, Inc. Under certain
circumstances, as set forth in the Rights Agreement, such Rights
shall be evidenced by separate certificates and shall no longer
be evidenced by this certificate. U.S. Bioscience, Inc. shall
mail to the registered holder of this certificate a copy of the
Rights Agreement without charge within five days after receipt of
a written request therefor. Under certain circumstances as
------------------------------
provided in Section 7(e) of the Rights Agreement, Rights issued
---------------------------------------------------------------
to or Beneficially Owned by Acquiring Persons or their Affiliates
-----------------------------------------------------------------
or Associates (as such terms are defined in the Rights Agreement)
-----------------------------------------------------------------
or any subsequent holder of such Rights shall be null and void
--------------------------------------------------------------
and may not be transferred to any Person.
----------------------------------------
(d) As soon as practicable after the Distribution Date, the
Company will prepare and execute, the Rights Agent will countersign,
and the Company will send or cause to be sent (and the Rights Agent
will, if requested, send), by first class mail, postage prepaid, to
each record holder of the Common Stock as of the close of business on
the Distribution Date, as shown by the records of the Company, at the
address of such holder shown on such records, a certificate in the
form provided by Section 4 hereof (a "Right Certificate"), evidencing
one Right (subject to adjustment as provided herein) for each share of
Common Stock so held. As of and after the Distribution Date, the
Rights shall be evidenced solely by Right Certificates and may be
transferred by the transfer of the Right Certificate as permitted
hereby, separately and apart from any transfer of one or more shares
of Common Stock.
<PAGE>
<PAGE>
Section 4. Form of Right Certificates. The Right
--------------------------
Certificates (and the forms of election to purchase shares, cer-
tificate and assignment to be printed on the reverse thereof), when,
as and if issued, shall be substantially in the form set forth in
Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed
thereon as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
stock exchange on which the Common Stock or the Rights may from time
to time be listed or as the Company may deem appropriate to conform to
usage or otherwise and as are not inconsistent with the provisions of
this Rights Agreement. Subject to the provisions of Section 22
hereof, Right Certificates evidencing Rights whenever issued, (i)
shall be dated as of the date of issuance of the Rights they represent
and (ii) subject to adjustment from time to time as provided herein,
on their face shall entitle the holders thereof to purchase such
number of shares (including fractional shares which are integral
multiples of one-hundredth of a share) of Preferred Stock as shall be
set forth therein at the price payable upon exercise of a Right pro-
vided by Section 7(b) hereof as the same may from time to time be
adjusted as provided herein (the "Exercise Price").
<PAGE>
<PAGE>
Section 5. Countersignature and Registration.
---------------------------------
(a) Each Right Certificate shall be executed on behalf of
the Company by its Chairman of the Board, President or any Vice
President, either manually or by facsimile signature, and have affixed
thereto the Company's seal or a facsimile thereof which shall be
attested by the Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. Each Right Certificate
shall be countersigned by the Rights Agent either manually or by
facsimile signature and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have
signed any Right Certificate shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and
delivery of the certificate by the Company, such Right Certificate,
nevertheless, may be countersigned by the Rights Agent and issued and
delivered with the same force and effect as though the person who
signed such Right Certificates had not ceased to be such officer of
the Company. Any Right Certificate may be signed on behalf of the
Company by any person who, on the date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign such
Right Certificate, although at the date of the execution of this
Rights Agreement any such person was not such an officer.
<PAGE>
<PAGE>
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or one or more
offices designated as the appropriate place for surrender of Right
Certificates upon exercise or transfer, and in such other locations as
may be required by law, books for registration and transfer of the
Right Certificates issued hereunder. Such books shall show the names
and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
-----------------------------------------------
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
--------------------------------------------------------------
Certificates.
------------
(a) Subject to the provisions of Section 7(e), 7(f) and 14
hereof, at any time after the Close of Business on the Distribution
Date, and at or prior to the Close of Business on the earlier of the
Expiration Date or the Final Expiration Date, any Right Certificate,
may be (i) transferred or (ii) split up, combined or exchanged for one
or more other Right Certificates, entitling the registered holder to
purchase a like number of shares of Preferred Stock as the Right
Certificate or Rights Certificates surrendered then entitled such
holder to purchase. Any registered holder desiring to transfer any
Right Certificate shall surrender the Right Certificate at the office
of the Rights
<PAGE>
<PAGE>
Agent designated for the surrender of Right Certificates with the form
of certificate and assignment on the reverse side thereof duly
endorsed (or enclosed with such Right Certificate a written instrument
of transfer in form satisfactory to the Company and the Rights Agent),
duly executed by the registered holder thereof or his attorney duly
authorized in writing, and with such signature duly guaranteed. Any
registered holder desiring to split up, combine or exchange any Right
Certificate shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate to be split up,
combined or exchanged at the office of the Rights Agent designated
therefor. Thereupon, the Rights Agent shall countersign and deliver
to the person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any Transfer Tax that may
be imposed in connection with any transfer, split up, combination or
exchange of any Right Certificates.
(b) Subject to the provisions of Section 7(e), 7(f) and 14
hereof, upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them
and, if requested by the Company, reimbursement to the Company and the
Rights Agent of all reasonable
<PAGE>
<PAGE>
expenses incidental thereto, or upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company shall
issue and deliver a new Right Certificate of like tenor to the Rights
Agent for delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Exercise Price; Expiration
----------------------------------------------
Date of Rights.
--------------
(a) The Rights shall not be exercisable until, and shall
become exercisable on, the Distribution Date (unless otherwise
provided herein, including, without limitation, the restrictions on
exercisability set forth in Section 7(e) and 23(a) hereof). Except as
otherwise provided herein, the Rights may be exercised, in whole or in
part, at any time commencing with the Distribution Date upon surrender
of the Right Certificate, with the form of election to purchase and
certificate on the reverse side thereof duly executed (with signatures
duly guaranteed), to the Rights Agent at the principal office of the
Rights Agent in New York, New York, together with payment of the
Exercise Price for each Right exercised, subject to adjustment as
hereinafter provided, at or prior to the Close of Business on the
earlier of (i) May 19, 2005 (the "Final Expiration Date") or (ii) the
date on which the Rights are redeemed as provided in Section 23 hereof
<PAGE>
<PAGE>
(such earlier date being herein referred to as the "Expiration Date").
(b) The Exercise Price shall initially be $15 for each one
one-hundredth (1/100) of a share of Preferred Stock issued pursuant to
the exercise of a Right. The Exercise Price and the number of shares
of Preferred Stock or other securities to be acquired upon exercise of
a Right shall be subject to adjustment from time to time as provided
in Sections 11 and 13 hereof. The Exercise Price shall be payable in
lawful money of the United States of America, in accordance with
paragraph (c) below.
(c) Except as otherwise provided herein, upon receipt of a
Right Certificate representing exercisable Rights with the form of
election to purchase duly executed, accompanied by payment by
certified check, cashier's check, bank draft or money order payable to
the Company or the Rights Agent of the Exercise Price for the shares
to be purchased and an amount equal to any applicable Transfer Tax
required to be paid by the holder of the Right Certificate in
accordance with Section 9(e) hereof, the Rights Agent shall thereupon
promptly (i) requisition from any transfer agent of the Preferred
Stock of the Company one or more certificates representing the number
of shares of Preferred Stock to be so purchased, and the Company
hereby authorizes and directs such transfer agent to comply with all
such requests, (ii) as provided in Section 14(b), at the election of
the Company, cause
<PAGE>
<PAGE>
depositary receipts to be issued in lieu of fractional shares of
Preferred Stock, (iii) if the election provided for in the immediately
preceding clause (ii) has not been made, requisition from the Company
the amount of cash to be paid in lieu of the issuance of fractional
shares in accordance with Section 14(b) hereof, (iv) after receipt of
such Preferred Stock certificates and, if applicable, depositary
receipts, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name
or names as may be designated by such holder and (v) when appropriate,
after receipt, promptly deliver such cash to or upon the order of the
registered holder of such Right Certificate; provided, however, that
-------- -------
in the case of a purchase of securities, other than Preferred Stock,
pursuant to Section 13 hereof, the Rights Agent shall promptly take
the appropriate actions corresponding in such case to that referred to
in the foregoing clauses (i) through (v) of this Section 7(c).
Notwithstanding the foregoing provisions of this Section 7(c), the
Company may suspend the issuance of shares of Preferred Stock upon
exercise of a Right for a reasonable period, not in excess of 90 days,
during which the Company seeks to register under the Securities Act of
1933, as amended (the "Act"), and any applicable securities law of any
other jurisdiction, the shares of Preferred Stock to be issued
pursuant to the Rights; provided, however, that nothing contained in
-------- -------
this
<PAGE>
<PAGE>
Section 7(c) shall relieve the Company of its obligations under
Section 9(c) hereof.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered
holder of such Right Certificate or his assign, subject to the
provisions of Section 14(b) hereof.
(e) Notwithstanding any provision of this Rights Agreement
to the contrary, from and after the time (the "invalidation time")
when any Person first becomes an Acquiring Person, other than pursuant
to a Qualifying Tender Offer, any Rights that are beneficially owned
by (x) such Acquiring Person (or any Associate or Affiliate of such
Acquiring Person), (y) a transferee of such Acquiring Person (or any
such Associate or Affiliate) who becomes a transferee after the
invalidation time or (z) a transferee of such Acquiring Person (or any
such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the invalidation time pursuant to either (I) a
transfer from the Acquiring Person to holders of its equity securities
or to any Person with whom it has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (II)
a transfer which the Board of Directors has determined is part of a
plan, arrangement or understanding which has
<PAGE>
<PAGE>
the purpose or effect of avoiding the provisions of this Section 7(e),
and subsequent transferees of such Persons referred to in clause (y)
and (z) above, shall be void without any further action and any holder
of such Rights shall thereafter have no rights whatsoever with respect
to such Rights under any provision of this Rights Agreement. The
Company shall use all reasonable efforts to ensure that the provisions
of this Section 7(e) are complied with, but shall have no liability to
any holder of Right Certificates or any other Person as a result of
its failure to make any determination with respect to an Acquiring
Person or its Affiliates, Associates or transferees hereunder. No
Right Certificate shall be issued pursuant to Section 3 hereof that
represents Rights beneficially owned by an Acquiring Person whose
Rights would be void pursuant to the provisions of this Section 7(e)
or any Associate or Affiliate thereof; no Right Certificate shall be
issued at any time upon the transfer of any Rights to an Acquiring
Person whose Rights would be void pursuant to the provisions of this
Section 7(e) or any Associate or Affiliate thereof or to any nominee
of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring
Person whose Rights would be void pursuant to the provisions of this
Section 7(e) shall be cancelled.
<PAGE>
<PAGE>
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated
to undertake any action with respect to a registered holder upon the
occurrence of any purported exercise as set forth in this Section 7
unless such registered holder shall have (i) completed and signed the
certificate following the form of election to purchase set forth on
the reverse side of the Right Certificate surrendered for such
exercise and (ii) provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right
-------------------------------------
Certificates. All Right Certificates surrendered for the purpose of
------------
exercise, transfer, split up, combination or exchange shall, if
surrendered to the Company or to any of its agents, be delivered to
the Rights Agent for cancellation or in cancelled form, or, if
surrendered to the Rights Agent, shall be cancelled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Rights Agreement. The
Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall cancel and retire, any Right
Certificate purchased or acquired by the Company otherwise than upon
the exercise thereof. The Rights Agent shall deliver all cancelled
Right Certificates to the
<PAGE>
<PAGE>
Company, or shall, at the written request of the Company, destroy such
cancelled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares of
-----------------------------------------
Preferred Stock.
---------------
(a) The Company covenants and agrees that it will cause to
be reserved and kept available out of its authorized and unissued
shares of Preferred Stock or out of authorized and issued shares of
Preferred Stock held in its treasury, such number of shares of
Preferred Stock as will from time to time be sufficient to permit the
exercise in full of all outstanding Rights.
(b) The Company shall use its best efforts to cause, from
and after such time as the Rights become exercisable, all shares of
Preferred Stock issued or reserved for issuance in accordance with
this Rights Agreement to be listed, upon official notice of issuance,
upon the principal national securities exchange, if any, upon which
the Common Stock is listed or, if the principal market for the Common
Stock is not on any national securities exchange, to be eligible for
quotation in the National Association of Securities Dealers' Automated
Quotation System or any successor thereto or other comparable
quotation system.
(c) The Company covenants and agrees that it will take all
such action as may be necessary to insure that all shares of
<PAGE>
<PAGE>
Preferred Stock delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such shares (subject to payment of
the Exercise Price in respect thereof), be duly and validly authorized
and issued and fully paid and nonassessable shares.
(d) The Company shall use its best efforts to (i) file, as
soon as practicable following the occurrence of the event described in
Section 11(a)(ii), or as soon as is required by law following the
Distribution Date, as the case may be, a registration statement under
the Act, with respect to the shares of Preferred Stock purchasable
upon exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable
after such filing, and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as of which
the Rights are no longer exercisable for Preferred Stock, and (b) the
date of the expiration of the Rights. The Company may temporarily
suspend, for a period of time not to exceed ninety days, the issuance
of shares of Preferred Stock upon exercise of a Right in order to
prepare and file a registration statement under the Act and permit it
to become effective. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities or
"blue sky" laws of the various states in con-
<PAGE>
<PAGE>
nection with the exercisability of the Rights. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be
exercisable in any jurisdiction unless the requisite qualification in
such jurisdiction shall have been obtained and until a registration
statement under the Act (if required) shall have been declared
effective.
(e) The Company covenants and agrees that it will pay when
due and payable any and all federal and state Transfer Taxes which may
be payable in respect of the issuance or delivery of the Right
Certificates or of any shares of Preferred Stock issued or delivered
upon the exercise of Rights. The Company shall not, however, be
required to pay any Transfer Tax which may be payable in respect of
any transfer or delivery of a Right Certificate to a Person other
than, or the issuance or delivery of certificates for Preferred Stock
upon exercise of Rights in a name other than that of, the registered
holder of the Right Certificate, and the Company shall not be required
to issue or deliver a Right Certificate or certificate for Preferred
Stock to a Person other than such registered holder until any such
Transfer Tax shall have been paid (any such Transfer Tax being payable
by the holder of such Right Certificate at the time of surrender) or
until it has been established to the Company's satisfaction that no
such Transfer Tax is due.
<PAGE>
<PAGE>
Section 10. Preferred Stock Record Date. Each Person in
---------------------------
whose name any certificate for shares of Preferred Stock is issued
upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the Preferred Stock represented thereby
on, and such certificate shall be dated as of, the date upon which the
Right Certificate evidencing such Rights was duly surrendered and
payment of the Exercise Price (and any applicable Transfer Taxes) was
made; provided, however, that, if the date of such surrender and
-------- -------
payment is a date upon which the Preferred Stock transfer books of the
Company are closed, such Person shall be deemed to have become the
record holder of such shares on, and such certificate shall be dated
as of, the next succeeding Business Day on which the Preferred Stock
transfer books of the Company are open. Prior to the exercise of the
Rights evidenced thereby, the holder of a Right Certificate, as such,
shall not be entitled to any rights of a stockholder of the Company
with respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends
or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. Adjustment of Exercise Price or Number of
-----------------------------------------
Shares. The Exercise Price and the number of shares of Preferred
------
<PAGE>
<PAGE>
Stock which may be purchased upon exercise of a Right are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time
after the date of this Rights Agreement (A) declare or pay
any dividend on Common Stock payable in shares of Common
Stock, (B) subdivide or split the outstanding shares of
Common Stock into a greater number of shares or (C) combine
or consolidate the outstanding shares of Common Stock into a
smaller number of shares or effect a reverse split of the
outstanding shares of Common Stock, then and in each such
event the number of shares of Preferred Stock issuable upon
the exercise of a Right after the record date for such event
(if one shall have been established or, if not, after the
date of such event) shall be the number of shares of
Preferred Stock issuable immediately prior to such event
multiplied by a fraction the numerator of which is the
number of Rights outstanding immediately prior to such event
and the denominator of which is the number of Rights
outstanding immediately after such event and the Exercise
Price after such event shall be the Exercise Price in effect
immediately prior to such event multiplied by such fraction.
If an event occurs which would require an adjustment under
<PAGE>
<PAGE>
both this Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii).
(ii) In the event that any Person (other than an
Exempt Person), alone or together with its Affiliates and
Associates, shall become an Acquiring Person, except
pursuant to a Qualifying Tender Offer, then, subject to the
last sentence of Section 23(a) and except as otherwise
provided in this Section 11, each holder of a Right, except
as provided in Section 7(e) hereof, shall thereafter have
the right to receive upon exercise of such Right in
accordance with the terms of this Rights Agreement and
payment of the Exercise Price, the greater of (1) the number
of one one-hundredths of a share of Preferred Stock for
which such Right was exercisable immediately prior to the
first occurrence of the event described in this Section
11(a)(ii) or (2) such number of one one-hundredths of a
share of Preferred Stock, based on the per share Fair Market
Value of the Preferred Stock (determined pursuant to Section
11(b) hereof) on the date of such first occurrence, having a
value equal to twice the Exercise
<PAGE>
<PAGE>
Price; provided, however, that if the transaction that would
-------- -------
otherwise give rise to the foregoing adjustment is also
subject to the provisions of Section 13 hereof, then only
the provisions of Section 13 hereof shall apply and no
adjustment shall be made pursuant to this Section 11(a)(ii).
(iii) In the event that the Company does not have
available sufficient authorized but unissued Preferred Stock
to permit the adjustments required pursuant to the foregoing
subparagraph (i) or the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii), the Company
shall take all such action as may be necessary to authorize
and reserve for issuance such number of additional shares of
Preferred Stock as may from time to time be required to be
issued upon the exercise in full of all Rights from time to
time outstanding and, if necessary, shall use its best
efforts to obtain stockholder approval thereof. In lieu of
issuing shares of Preferred Stock in accordance with the
foregoing subparagraphs (i) and (ii), the Company may, if
the Board of Directors determines (but only if at the time
of such determination by the Board of Directors there are
then in office not less than two Continuing Directors and
such action is approved by a
<PAGE>
<PAGE>
majority of the Continuing Directors then in office) that
such action is necessary or appropriate and not contrary to
the interests of holders of Rights, elect to issue or pay,
upon the exercise of the Rights, cash, property, shares of
Preferred or Common Stock, or any combination thereof,
having an aggregate Fair Market Value equal to the Fair
Market Value of the shares of Preferred Stock which
otherwise would have been issuable pursuant to Section
11(a)(ii), which Fair Market Value shall be determined by an
investment banking firm selected by the Board of Directors
(but only if at the time of such selection there are then in
office not less than two Continuing Directors and such
selection is approved by a majority of the Continuing
Directors then in office). For purposes of the preceding
sentence, the Fair Market Value of the Preferred Stock shall
be as determined pursuant to Section 11(b). Subject to
Section 23 hereof, any such election by the Board of
Directors of the Company must be made and publicly announced
within thirty (30) days after the date on which the event
described in Section 11(a)(ii) occurs.
(b) For the purpose of this Rights Agreement, the "Fair
Market Value" of any share of Preferred Stock, Common Stock
<PAGE>
<PAGE>
or any other stock or any Right or other security or any other
property on any date shall be determined as provided in this Section
11(b). In the case of a publicly-traded stock or other security, the
Fair Market Value on any date shall be deemed to be the average of the
daily closing prices per share of such stock or per unit of such other
security for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; provided,
--------
however, that in the event that the Fair Market Value per share of any
-------
share of Common Stock is determined during a period which includes any
date that is within 30 Trading Days after (i) the ex-dividend date for
a dividend or distribution on such stock payable in shares of Common
Stock or securities convertible into shares of Common Stock, or (ii)
the effective date of any subdivision, split, combination,
consolidation, reverse stock split or reclassification of such stock,
then, and in each such case, the Fair Market Value shall be
appropriately adjusted by the Board of Directors of the Company to
take into account ex-dividend or post-effective date trading. The
closing price for any day shall be the last sale price, regular way,
or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way (in either case, as reported
in the applicable transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock
Exchange), or, if the securities are not listed or
<PAGE>
<PAGE>
admitted to trading on the New York Stock Exchange, as reported in the
applicable transaction reporting system with respect to securities
listed on the principal national securities exchange on which such
security is listed or admitted to trading; or, if not listed or
admitted to trading on any national securities exchange, the last
quoted price (or, if not so quoted, the average of the high bid and
low asked prices) in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation
System ("NASDAQ") or such other system then in use; or, if no bids for
such security are quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market
maker making a market in such security selected by the Board of
Directors of the Company. The term "Trading Day" shall mean a day on
which the principal national securities exchange on which such
security is listed or admitted to trading is open for the transaction
of business or, if such security is not listed or admitted to trading
on any national securities exchange, a Business Day. If a security is
not publicly held or not so listed or traded, "Fair Market Value"
shall mean the fair value per share of stock or per other unit of such
other security, as determined by an independent investment banking
firm experienced in the valuation of securities selected in good faith
by the Board of Directors of the Company, or, if no such investment
<PAGE>
<PAGE>
banking firm is, in the good faith judgment of the Board of Directors,
available to make such determination, in good faith by the Board of
Directors of the Company; provided, however, that for purposes of
-------- -------
making the adjustment provided for by Section 11(a)(ii) hereof, the
Fair Market Value of a share of Preferred Stock shall not be less than
100% of the product of the Fair Market Value of a share of Common
Stock multiplied by the higher of the then Dividend Multiple or Vote
Multiple applicable to the Preferred Stock (as defined in the
Certificate of Designations relating to the Preferred Stock) and shall
not exceed 105% of the product of the then Fair Market Value of a
share of Common Stock multiplied by the higher of the then Dividend
Multiple or Vote Multiple applicable to the Preferred Stock. In the
case of property other than securities, the "Fair Market Value"
thereof shall be determined in good faith by the Board of Directors of
the Company based upon such appraisals or valuation reports of such
independent experts as the Board of Directors of the Company shall in
good faith determine to be appropriate in accordance with good
business practices and the interests of the holders of Rights. Any
such determination of Fair Market Value shall be described in a
statement filed with the Rights Agent and shall be binding upon the
Rights Agent.
<PAGE>
<PAGE>
(c) All calculations under this Section 11 shall be made to
the nearest cent or to the nearest one one-hundredth of a share, as
the case may be.
(d) Irrespective of any adjustment or change in the
Exercise Price or the number of shares of Preferred Stock issuable
upon the exercise of the Rights, the Right Certificates theretofore
and thereafter issued may continue to express the Exercise Price and
the number of shares to be issued upon exercise of the Rights as in
the initial Right Certificates issued hereunder but, nevertheless,
shall represent the Rights as so adjusted.
(e) Before taking any action that would cause an adjustment
reducing the purchase price per whole share of Preferred Stock upon
exercise of the Rights below the then par value, if any, of the shares
of Preferred Stock, the Company shall use its best efforts to take any
corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue
fully paid and non-assessable shares of such Preferred Stock at such
adjusted purchase price per share.
(f) Anything in this Section 11 to the contrary
notwithstanding, in the event of any reclassification of stock of the
Company or any recapitalization, reorganization or partial liquidation
of the Company or similar transaction, the Company
<PAGE>
<PAGE>
shall be entitled to make such further adjustments in the number of
shares of Preferred Stock which may be acquired upon exercise of the
Rights, and such adjustments in the Exercise Price therefor, in
addition to those adjustments expressly required by the other
paragraphs of this Section 11, as the Board of Directors of the
Company shall determine to be necessary or appropriate in order for
the holders of the Rights in such event to be treated equitably and in
accordance with the purpose and intent of this Rights Agreement or in
order that any such event shall not, but for such adjustment, in the
opinion of counsel to the Company, result in the stockholders of the
Company being subject to any United States federal income tax
liability by reason thereof.
(g) In the event the Company shall at any time after the
Record Date make any distribution on the shares of Common Stock of the
Company, whether by way of a dividend or a reclassification of stock,
a recapitalization, reorganization or partial liquidation of the
Company or otherwise, in cash or any debt security, debt instrument,
real or personal property or any other property (other than any shares
of Common Stock or other capital stock of the Company and other than
any right or warrant to acquire any such shares, including any debt
security convertible into or exchangeable for any such share, at less
than the Fair Market Value of such shares) and the amount of such cash
dividend or the Fair Market Value of such debt security, debt
instrument
<PAGE>
<PAGE>
or property exceeds 150% of the aggregate amount of the cash dividends
declared or paid on the Common Stock of the Company in the 15-month
period immediately preceding such distribution, then and in each such
event, unless such distribution is part of or is made in connection
with a transaction to which Section 11(a)(ii) or Section 13 hereof
applies, the Exercise Price shall be reduced by an amount equal to the
cash or the Fair Market Value of such distribution, as the case may
be, per share of Common Stock of the Company. For purposes hereof,
the Fair Market Value of any property distributed to the holders of
shares of Common Stock of the Company shall be the Fair Market Value
of such property as determined by an independent investment banking
firm experienced in the valuation of securities or the other property
so distributed, as the case may be, selected in good faith by the
Board of Directors of the Company, or, if no such investment banking
firm is in the good faith judgment of the Board of Directors available
to make such determination, in good faith by the Board of Directors of
the Company, whose determination shall be final and binding on the
Company, the Rights Agent and the holders of Rights.
Section 12. Certification of Adjusted Exercise Price or
-------------------------------------------
Number of Shares. Whenever an adjustment is made as provided in
----------------
Section 11, 13 or 23(c), the Company shall (a) promptly prepare a
certificate setting forth such adjustment, and a brief
<PAGE>
<PAGE>
statement of the facts giving rise to such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the
Preferred Stock a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate in accordance
with Section 25. Notwithstanding the foregoing sentence, the failure
of the Company to make such certification or give such notice shall
not affect the validity of or the force or effect of the requirement
for such adjustment. Any adjustment to be made pursuant to Section
11, 13 or 23(c) of this Rights Agreement shall be effective as of the
date of the event giving rise to such adjustment. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge
of any adjustment unless and until it shall have received such
certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
--------------------------------------------
Assets or Earning Power.
-----------------------
(a) Except for any transaction approved by the Board of
Directors (but only if at the time of such approval by the Board of
Directors there are then in office not less than two Continuing
Directors and such action is approved by a majority of the Continuing
Directors then in office), in the event that, at any time on or after
the Distribution Date, (x) the Company shall, directly or indirectly,
consolidate with, or merge with
<PAGE>
<PAGE>
and into, any other Person or Persons (other than an Exempt Person)
and the Company shall not be the surviving or continuing corporation
of such consolidation or merger, or (y) any Person or Persons (other
than an Exempt Person) shall, directly or indirectly, consolidate
with, or merge with and into, the Company, and the Company shall be
the continuing or surviving corporation of such consolidation or
merger and, in connection with such consolidation or merger, all or
part of the outstanding shares of Common Stock shall be changed into
or exchanged for stock or other securities of any other Person (other
than an Exempt Person) or of the Company or cash or any other
property, or (z) the Company or one or more of its Subsidiaries shall,
directly or indirectly, sell or otherwise transfer to any other Person
or any Affiliate or Associate of such Person, in one or more
transactions, or the Company or one or more of its Subsidiaries shall
sell or otherwise transfer to any Persons in one or a series of
related transactions, assets or earning power aggregating more than
50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole), then, on the first occurrence of any such event,
proper provision shall be made so that (i) each holder of record of a
Right, except as provided in Section 7(e) hereof, shall thereafter
have the right to receive, upon the exercise thereof and payment of
the Exercise Price in accordance with the terms of this Rights
Agreement, such
<PAGE>
<PAGE>
number of shares of validly issued, fully paid, non-assessable and
freely tradeable Common Stock of the Principal Party (as defined
herein), not subject to any liens, encumbrances, rights of first
refusal or other adverse claims, as shall, based on the Fair Market
Value of the Common Stock of the Principal Party on the date of the
Consummation of such consolidation, merger, sale or transfer, equal
twice the Exercise Price; (ii) such Principal Party shall thereafter
be liable for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, all the obligations and duties of the
Company pursuant to this Rights Agreement; (iii) the term "Company"
for all purposes of this Rights Agreement shall thereafter be deemed
to refer to such Principal Party; (iv) such Principal Party shall take
such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock in accordance with the
provisions of Section 9 hereof applicable to the reservation of
Preferred Stock) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its shares
of Common Stock thereafter deliverable upon the exercise of the
Rights; provided, however, that, upon the subsequent occurrence of any
-------- -------
merger, consolidation, sale of all or substantially all of the assets,
recapitalization, reclassification of shares, reorganization or other
extraordinary transaction in
<PAGE>
<PAGE>
respect of such Principal Party, each holder of a Right shall
thereupon be entitled to receive, upon exercise of a Right and payment
of the Exercise Price, such cash, shares, rights, warrants and other
property which such holder would have been entitled to receive had it,
at the time of such transaction, owned the shares of Common Stock of
the Principal Party purchasable upon the exercise of a Right, and such
Principal Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the
subsequent exercise of the Rights in accordance with the terms hereof
for such cash, shares, rights, warrants and other property and (v) the
provisions of Section 11(a)(ii) hereof shall be of no effect following
the occurrence of any event described in clause (x), (y) or (z) above
of this Section 13(a).
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (x) or
(y) of the first sentence of Section 13(a) hereof: (A) the Person
that is the issuer of the securities into which shares of Common Stock
of the Company are changed or otherwise exchanged or converted in such
merger or consolidation, or, if there is more than one such issuer,
the issuer of the Common Stock of which has the greatest market value
or (B) if no securities are so issued, (x) the Person that is the
other party to the merger or consolidation and that survives such
merger or
<PAGE>
<PAGE>
consolidation, or, if there is more than one such Person, the Person
the Common Stock of which has the greatest market value or (y) if the
Person that is the other party to the merger or consolidation does not
survive the merger or consolidation, the Person that does survive the
merger or consolidation (including the Company if it survives); and
(ii) in the case of any transaction described in (z) of
the first sentence in Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions, or, if each
Person that is a party to such transaction or transactions receives
the same portion of the assets or earning power so transferred or if
the Person receiving the greatest portion of the assets or earning
power cannot be determined, whichever of such Persons as is the issuer
of Common Stock having the greatest market value of shares
outstanding; provided, however, that in any such case, if the Common
-------- -------
Stock of such Person is not at such time and has not been continuously
over the preceding 12-month period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has been so
registered, the term "Principal Party" shall refer to such other
Person, or if such Person is a Subsidiary, directly or indirectly, of
more than one Person, the Common Stocks of all of which are and have
been so
<PAGE>
<PAGE>
registered, the term "Principal Party" shall refer to whichever of
such Persons is the issuer of the Common Stock having the greatest
market value of shares outstanding.
(c) The Company shall not consummate any consolidation,
merger or sale or transfer of assets or earning power referred to in
Section 13(a) unless the Principal Party shall have a sufficient
number of authorized shares of its Common Stock that have not been
issued or reserved for issuance to permit exercise in full of all
Rights in accordance with this Section 13 and unless prior thereto the
Company and the Principal Party involved therein shall have executed
and delivered to the Rights Agent an agreement confirming that the
Principal Party shall, upon consummation of such consolidation, merger
or sale or transfer of assets or earning power, assume this Rights
Agreement in accordance with Section 13(a) hereof and that all rights
of first refusal or preemptive rights in respect of the issuance of
shares of Common Stock of the Principal Party upon exercise of
outstanding Rights have been waived and that such transaction shall
not result in a default by the Principal Party under this Rights
Agreement, and further providing that, as soon as practicable after
the date of any consolidation, merger or sale or transfer of assets or
earning power referred to in Section 13(a) hereof, the Principal Party
will:
<PAGE>
<PAGE>
(i) prepare and file a registration statement under
the Act with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate
form, use its best efforts to cause such registration
statement to become effective as soon as practicable after
such filing and use its best efforts to cause such
registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act)
until the date of expiration of the Rights, and similarly
comply with applicable state securities laws;
(ii) use its best efforts to list (or continue the
listing of) the Rights and the securities purchasable upon
exercise of the Rights on a national securities exchange or
to meet the eligibility requirements for quotation on
NASDAQ; and
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party which comply in
all respects with the requirements for registration on Form
10 (or any successor form) under the Exchange Act. In the
event that any of the transactions described in Section
13(a) hereof shall occur at any time after the occurrence of
a transaction described in Section 11(a)(ii) hereof, the
Rights which
<PAGE>
<PAGE>
have not theretofore been exercised shall, subject to the
provisions of Section 7(e) hereof, thereafter be exercisable
in the manner described in Section 13(a).
(d) In case the Principal Party which is to be a party to a
transaction referred to in this Section 13 has a provision in any of
its authorized securities or in its Certificate of Incorporation or
By-laws or other instrument governing its corporate affairs, which
provision would have the effect of (i) causing such Principal Party to
issue, in connection with, or as a consequence of, the consummation of
a transaction referred to in this Section 13, shares of Common Stock
of such Principal Party at less than the then Fair Market Value per
share (determined pursuant to Section 11(b) hereof) or securities
exercisable for, or convertible into, Common Stock of such Principal
Party at less than such then Fair Market Value (other than to holders
of Rights pursuant to this Section 13) or (ii) providing for any
special tax or similar payment in connection with the issuance to any
holder of a Right of Common Stock of such Principal Party pursuant to
the provisions of this Section 13, then, in such event, the Company
shall not consummate any such transaction unless prior thereto the
Company and such Principal Party shall have executed and delivered to
the Rights Agent a supplemental agreement providing that the provision
in question of such Principal Party shall have been canceled, waived
or amended, or
<PAGE>
<PAGE>
that the authorized securities shall be redeemed, so that the
applicable provision will have no effect in connection with, or as a
consequence of, the consummation of the proposed transaction.
Section 14. Fractional Rights and Fractional Shares.
---------------------------------------
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional
Rights (i.e., Rights to acquire less than one one-hundredth of a share
----
of Preferred Stock), unless such fractional Rights result from a
transaction referred to in Section 11(a)(i) hereof. If the Company
shall determine not to issue such fractional Rights, then, in lieu of
such fractional Rights, there shall be paid to the holders of record
of the Right Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same
fraction of the Fair Market Value of a whole Right.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral
multiples of one-hundredth of a share) upon exercise of the Rights or
to distribute certificates which evidence fractional shares (other
than fractions which are integral multiples of one-hundredth of a
share). In lieu of issuing fractions of shares of Preferred Stock,
the Company may, at its election, issue depositary receipts evidencing
fractions
<PAGE>
<PAGE>
of shares pursuant to an appropriate agreement between the Company and
a depositary selected by it, provided that such agreement shall
--------
provide that the holders of such depositary receipts shall have all of
the rights, privileges and preferences to which they would be entitled
as owners of the Preferred Stock. With respect to fractional shares
that are not integral multiples of one-hundredth of a share, if the
Company does not issue such fractional shares or depositary receipts
in lieu thereof, there shall be paid to the holders of record of Right
Certificates at the time such Right Certificates are exercised as
herein provided an amount in cash equal to the same fraction of the
Fair Market Value of a share of Preferred Stock.
(c) The holder of a Right by the acceptance of a Right
expressly waives his right to receive any fractional Right or any
fractional shares of Preferred Stock (other than fractions which are
integral multiples of one one-hundredth of a share) upon exercise of a
Right.
Section 15. Rights of Action. All rights of action in
----------------
respect of this Rights Agreement, except the rights of action given to
the Rights Agent in Section 18 hereof, are vested in the respective
registered holders of the Right Certificates (and, prior to the
Distribution Date, the holders of record of the Common Stock); and any
holder of record of any Right Certificate (or, prior to the
Distribution Date, of the Common Stock),
<PAGE>
<PAGE>
without the consent of the Rights Agent or of the holder of any other
Right Certificate (or, prior to the Distribution Date, of the Common
Stock), may, in his own behalf and for his own benefit, enforce, and
may institute and maintain any suit, action or proceeding against the
Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Rights Agreement.
Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this
Rights Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened
violations of, the obligations of any Person subject to this Rights
Agreement.
Section 16. Agreement of Right Holders. Each holder of a
--------------------------
Right, by accepting the same, consents and agrees with the Company and
the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be
evidenced by the certificates for Common Stock registered in the
name of the holders of Common Stock (together, as applicable,
with the Summary of Rights), which certificates for Common Stock
shall also constitute certificates for
<PAGE>
<PAGE>
Rights, and not by separate Right Certificates, and each Right
shall be transferable only simultaneously and together with the
transfer of shares of Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the office of the Rights Agent designated for such
purpose, duly endorsed or accompanied by a proper instrument of
transfer; and
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor
the Rights Agent shall be affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a
-------------------------------------
Stockholder. No holder, as such, of any Right Certificate shall be
-----------
entitled to vote, receive dividends or be deemed for any purpose the
holder of Preferred Stock or any other securities which may at any
time be issuable on the exercise of the Rights represented thereby,
nor shall anything contained herein or in any
<PAGE>
<PAGE>
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof (except as
provided in Section 7(f) hereof), or to give or withhold consent to
any corporate action (except as provided in Section 7(f) hereof), or
to receive notice of meetings or other actions affecting stockholders
(except as provided in Section 24 hereof), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced
by such Right Certificate shall have been exercised in accordance with
the provisions hereof.
Section 18. Concerning the Rights Agent.
---------------------------
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and,
from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the
administration and execution of this Rights Agreement and the exercise
and performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any
loss, liability, or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done
or omitted to be done by the Rights Agent in connection with the
<PAGE>
<PAGE>
acceptance and administration of this Rights Agreement, including the
cost and expenses of defending against any claim of liability relating
to the Rights or this Rights Agreement.
(b) The Rights Agent shall be protected against, and shall
incur no liability for or in respect of, any action taken, suffered or
omitted by it in connection with its administration of this Rights
Agreement in reliance upon any Right Certificate or certificate for
Preferred Stock or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement or other
paper or document believed by it to be genuine and to be signed,
executed and, where necessary, verified or acknowledged, by the proper
person or persons.
Section 19. Merger or Consolidation of, or Change in Name
---------------------------------------------
of, the Rights Agent.
--------------------
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be con-
solidated, or any corporation resulting from any merger or consoli-
dation to which the Rights Agent or any successor Rights Agent shall
be a party, or any corporation succeeding to the corporate trust or
stock transfer business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Rights
Agreement without the execution or filing of any paper or any further
act on the part of any of the parties
<PAGE>
<PAGE>
hereto, provided that such corporation would be eligible for
--------
appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Rights Agreement any of
the Rights Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either
in the name of the predecessor Rights Agent or in the name of the
successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in
this Rights Agreement.
(b) In case at any time the name of the Rights Agent shall
be changed and at such time any of the Right Certificates shall have
been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates
so countersigned; in case at that time any of the Right Certificates
shall not have been countersigned, the Rights Agent may countersign
such Right Certificates either in its prior name or in its changed
name; in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Rights Agreement.
<PAGE>
<PAGE>
Section 20. Duties of Rights Agent. The Rights Agent
----------------------
undertakes the duties and obligations imposed by this Rights Agreement
upon the following terms and conditions, by all of which the Company
and the holders of Right Certificates by their acceptance thereof
shall be bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under this
Rights Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter be proved or established by the Company prior
to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by
a certificate signed by the Chairman of the Board, the President or
any Vice President and by the Treasurer or the Secretary of the
Company and delivered to the Rights Agent. Any such certificate shall
be full authorization to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this Rights
Agreement in reliance upon such certificate.
<PAGE>
<PAGE>
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this Rights
Agreement or in the Right Certificates (except its countersignature
thereof) or be required to verify the same, but all such statements
and recitals are and shall be deemed to have been made by the Company
only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Rights Agreement or the execution
and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition
contained in this Rights Agreement or in any Right Certificate; nor
shall it be responsible for any adjustment required under the
provisions of Section 11 or 13 hereof or responsible for the manner,
method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates
after receipt of a certificate describing any such adjustment); nor
shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any
<PAGE>
<PAGE>
shares of Preferred Stock to be issued pursuant to this Rights
Agreement or any Right Certificate or as to whether any shares of
Preferred Stock will, when issued, be validly authorized and issued,
fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the Rights
Agent for the carrying out or performing by the Rights Agent of the
provisions of the Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the President or any Vice
President or the Secretary or the Treasurer of the Company, and to
apply to such officers for advice or instructions in connection with
its duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any shareholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not the
<PAGE>
<PAGE>
Rights Agent under this Rights Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for the
Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss
to the Company resulting from any such act, default, neglect or
misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent or
----------------------
any successor Rights Agent may resign and be discharged from its
duties under this Rights Agreement upon 30 days' notice in writing
mailed to the Company and to each transfer agent of the Common Stock
and the Preferred Stock by registered or certified mail. The Company
may remove the Rights Agent or any successor Rights Agent (with or
without cause) upon 30 days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Stock and the Preferred Stock by
registered or certified mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company
shall appoint a successor to the Rights Agent. Notwithstanding the
foregoing provisions of this
<PAGE>
<PAGE>
Section 21, in no event shall the resignation or removal of a Rights
Agent be effective until a successor Rights Agent shall have been
appointed and have accepted such appointment. If the Company shall
fail to make such appointment within a period of 30 days after such
removal or after it has been notified in writing of such resignation
or incapacity by the resigning or incapacitated Rights Agent or by the
holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the incumbent
Rights Agent or the holder of record of any Right Certificate may
apply to any court of competent jurisdiction for the appointment of a
new Rights Agent. Any successor Rights Agent, whether appointed by
the Company or by such a court, shall be (a) a corporation organized
and doing business under the laws of the United States or of any state
thereof, in good standing, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to
supervision or examination in the conduct of its corporate trust or
stock transfer business by federal or state authorities and which has
at the time of its appointment as Rights Agent a combined capital and
surplus of at least $5,000,000 or (b) an Affiliate controlled by a
corporation described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been
originally
<PAGE>
<PAGE>
named as Rights Agent without further act or deed, but the predecessor
Rights Agent shall deliver and transfer to the successor Rights Agent
any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment,
the Company shall file notice thereof in writing with the predecessor
Rights Agent and each transfer agent of the Common Stock and Preferred
Stock, and mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights Agent
or the appointment of the successor Rights Agent, as the case may be.
Notwithstanding the foregoing provisions, in the event of resignation,
removal or incapacity of the Rights Agent, the Company shall have the
authority to act as the Rights Agent until a successor Rights Agent
shall have assumed the duties of the Rights Agent hereunder.
Section 22. Issuance of New Right Certificates.
----------------------------------
Notwithstanding any of the provisions of this Rights Agreement or of
the Rights to the contrary, the Company may, at its option, issue new
Right Certificates evidencing Rights in such form as may be approved
by its Board of Directors to reflect any adjustment or change in the
Exercise Price per share and the number or
<PAGE>
<PAGE>
kind or class of shares of stock or other securities or property
purchasable under the Right Certificates made in accordance with the
provisions of this Rights Agreement.
Section 23. Redemption.
----------
(a) The Company may, at its option, but only by the vote of
a majority of the Board of Directors, redeem all but not less than all
of the then outstanding Rights, at any time prior to the Close of
Business on the earlier of (i) the tenth day following the Stock
Acquisition Date (subject to extension by the Company as provided in
Section 26 hereof) or (ii) the Final Expiration Date, at a redemption
price of $.001 per Right, subject to adjustments as provided in
subsection (c) below (the "Redemption Price"); provided, however, that
-------- -------
from and after the time that any Person shall become an Acquiring
Person (other than pursuant to a Qualifying Tender Offer), the Company
may redeem the Rights only if at the time of the action of the Board
of Directors there are then in office not less than two Continuing
Directors and such redemption is approved by a majority of the
Continuing Directors then in office. Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall not be
exercisable pursuant to Section 11(a)(ii) prior to the expiration of
the Company's right of redemption hereunder.
(b) Without any further action and without any notice, the
right to exercise the Rights will terminate effective at the
<PAGE>
<PAGE>
time of the action of the Board of Directors ordering the redemption
of the Rights and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price. Within 10 days after the
effective time of the action of the Board of Directors ordering the
redemption of the Rights, the Company shall give notice of such
redemption to the holders of the then outstanding Rights by mailing
such notice to all such holders at their last addresses as they appear
upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the
Common Stock. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the
notice. Each notice of redemption will state the method by which the
payment of the Redemption Price will be made. At the option of the
Board of Directors, the Redemption Price may be paid in cash to each
Rights holder or by the issuance of shares (and, at the Company's
election pursuant to Section 14(b) hereof, cash or depositary receipts
in lieu of fractions of shares other than fractions which are integral
multiples of one one-hundredth (1/100) of a share) of Preferred Stock
having a Fair Market Value equal to such cash payment.
(c) In the event the Company shall at any time after the
date of this Rights Agreement (A) pay any dividend on Common Stock in
shares of Common Stock, (B) subdivide or split the out
<PAGE>
<PAGE>
standing shares of Common Stock into a greater number of shares or (C)
combine or consolidate the outstanding shares of Common Stock into a
smaller number of shares or effect a reverse split of the outstanding
shares of Common Stock, then, and in each such event, the Redemption
Price shall be adjusted so that the Redemption Price after such event
shall equal the Redemption Price immediately prior to such event
multiplied by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock
outstanding immediately prior to such event; provided, however, that
-------- -------
in each case such adjustment to the Redemption Price shall be made
only if the amount of the Redemption Price shall be reduced or
increased by $.001 per Right.
Section 24. Notice of Proposed Actions.
--------------------------
(a) In case the Company, after the Distribution Date, shall
propose (i) to effect any of the transactions referred to in Section
11(a)(i) or 11(g) or (ii) to offer to the holders of record of its
Common Stock options, warrants, or other rights to subscribe for or to
purchase shares of Common Stock (including any security convertible
into or exchangeable for Common Stock) or shares of stock of any class
or any other securities, options, warrants, convertible or
exchangeable securities or other rights, or (iii) to effect any
reclassification of its Preferred Stock or
<PAGE>
<PAGE>
Common Stock or any recapitalization or reorganization of the Company,
or (iv) to effect any consolidation or merger with or into, or to
effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more
transactions, of more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to, any other Person
or Persons, or (v) to effect the liquidation, dissolution or winding
up of the Company, then, in each such case, the Company shall give to
each holder of record of a Right Certificate, in accordance with
Section 25, notice of such proposed action, which shall specify the
record date for the purposes of such transaction referred to in
Section 11(a)(i) or such dividend or distribution, or the date on
which such reclassification, recapitalization, reorganization,
consolidation, merger, sale or transfer of assets, liquidation,
dissolution, or winding up is to take place and the record date for
determining participation therein by the holders of record of Common
Stock or Preferred Stock, if any such date is to be fixed, and such
notice shall be so given in the case of any action covered by clause
(i) or (ii) above at least 10 days prior to the record date for deter-
mining holders of record of the Preferred Stock for purposes of such
action, and in the case of any such other action, at least 10 days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of
<PAGE>
<PAGE>
record of Common Stock or Preferred Stock, whichever shall be the
earlier. The failure to give notice required by this Section 24 or
any defect therein shall not affect the legality or validity of the
action taken by the Company or the vote upon any such action.
(b) In case any of the transactions referred to in Section
11(a)(i), 11(g) or 13 of this Rights Agreement are proposed, then, in
any such case, the Company shall give to each holder of Rights, in
accordance with Section 25 hereof, notice of the proposal of such
transaction at least 10 days prior to consummating such transaction,
which notice shall specify the proposed event and the consequences of
the event to holders of Rights under Section 11(a)(i), 11(g) or 13
hereof, as the case may be, and, upon consummating such transaction,
shall similarly give notice thereof to each holder of Rights.
Section 25. Notices. Notices or demands authorized by this
-------
Rights Agreement to be given or made by the Rights Agent or by the
holder of record of any Right Certificate or Right to or on the
Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
U.S. Bioscience, Inc.
One Tower Bridge
100 Front Street
West Conshohocken, Pennsylvania 19428
Attention: Corporate Secretary
<PAGE>
<PAGE>
Subject to the provisions of Section 21, any notice or demand
authorized by this Rights Agreement to be given or made by the Company
or by the holder of record of any Right Certificate or Right to or on
the Rights Agent shall be sufficiently given or made if sent by first-
class mail, postage prepaid, addressed (until another address is filed
in writing with the Company) as follows:
Chemical Mellon Shareholder Services L.L.C.
450 West 33rd Street
15th Floor
New York, New York 10001
Attention: Connie Cotter
Notices or demands authorized by this Rights Agreement to be given or
made by the Company or the Rights Agent to the holder of record of any
Right Certificate or Right shall be sufficiently given or made if sent
by first-class mail, postage prepaid, addressed to such holder at the
address of such holder as shown on the registry books of the Company.
Section 26. Supplements and Amendments. For as long as the
--------------------------
Rights are then redeemable and except as provided in the last sentence
of this Section 26, the Company may in its sole and absolute
discretion, and the Rights Agent shall if the Company so directs,
supplement or amend any provision of this Agreement without the
approval of any holders of the Rights. At any time when the Rights
are not then redeemable and except as provided in the last sentence of
this Section 26, the Company may, and the
<PAGE>
<PAGE>
Rights Agent shall if the Company so directs, supplement or amend this
Rights Agreement without the approval of any holders of Right
Certificates (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or inconsistent
with any other provisions herein or (iii) to change or supplement the
provisions hereunder in any manner which the Company may deem
necessary or desirable, provided that no such supplement or amendment
pursuant to this clause (iii) shall materially adversely affect the
interest of the holders of Right Certificates. Upon the delivery of a
certificate from an appropriate officer of the Company which states
that the proposed supplement or amendment is in compliance with the
terms of this Section 26, the Rights Agent shall execute such
supplement or amendment. This Agreement may be amended or
supplemented at any time with the approval of a majority of the
registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Stock). Notwithstanding anything
contained in this Rights Agreement to the contrary, no supplement or
amendment shall be made which changes the Redemption Price or the
Final Expiration Date and supplements or amendments may be made after
the time that any Person becomes an Acquiring Person (other than
pursuant to a Qualifying Tender Offer) only if at the time of the
action of the Board of Directors approving such supplement or
amendment there are then in office not less than two Continuing
Directors
<PAGE>
<PAGE>
and such supplement or amendment is approved by a majority of the
Continuing Directors then in office.
Section 27. Successors. All of the covenants and
----------
provisions of this Rights Agreement by or for the benefit of the
Company or the Rights Agent shall bind and inure to the benefit of
their respective successors and assigns hereunder.
Section 28. Benefits of this Rights Agreement. Nothing in
---------------------------------
this Rights Agreement shall be construed to give to any person or
corporation other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the
Distribution Date, the holders of Common Stock in their capacity as
holders of the Rights) any legal or equitable right, remedy or claim
under this Rights Agreement; but this Rights Agreement shall be for
the sole and exclusive benefit of the Company, the Rights Agent and
the holders of record of the Right Certificates (and, prior to the
Distribution Date, the holders of Common Stock in their capacity as
holders of the Rights).
Section 29. Delaware Contract. This Rights Agreement and
-----------------
each Right Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Delaware and for all
purposes shall be governed by and construed and enforced in accordance
with the laws of such state applicable to contracts to be made and
performed entirely within such state.
<PAGE>
<PAGE>
Section 30. Counterparts. This Rights Agreement may be
------------
executed in any number of counterparts and each of such counterparts
shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
Section 31. Descriptive Headings. Descriptive headings of
--------------------
the several Sections of this Rights Agreement are inserted for
convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
Section 32. Severability. If any term, provision, covenant
------------
or restriction of this Rights Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Rights Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Rights Agreement to be duly executed, all as of the day and year first
above written.
U.S. BIOSCIENCE, INC.
Attest:/s/ Martha E. Manning By /s/ Robert I. Kriebel
----------------------- ---------------------------------
(SEAL) Robert I. Kriebel
Senior Vice President -
Finance and Administration
and Treasurer
RIGHTS AGENT
Attest:/s/ John F. Keegan By /s/ George O. Renz
----------------------- ---------------------------------
(SEAL) George O. Renz
Assistant Vice President
<PAGE>
<PAGE>
EXHIBIT A
UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN THE
RIGHTS AGREEMENT (AS REFERRED TO BELOW), RIGHTS
ISSUED TO OR BENEFICIALLY OWNED BY ACQUIRING
PERSONS OR THEIR AFFILIATES OR ASSOCIATES (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE NULL AND
VOID AND MAY NOT BE TRANSFERRED TO ANY PERSON.
U.S. BIOSCIENCE, INC.
SUMMARY OF RIGHTS TO PURCHASE
SERIES A JUNIOR PREFERRED STOCK
On May 19, 1995, the Board of Directors of U.S. Bioscience,
Inc. (the "Company") declared a dividend distribution of one Preferred
Stock Purchase Right for each outstanding share of Common Stock, par
value $.005 per share (the "Common Stock"), of the Company. The
distribution is payable as of May 29, 1995 to stockholders of record
on that date. Each Right entitles the registered holder to purchase
from the Company one one-hundredth (1/100) of a share of preferred
stock of the Company, designated as Series A Junior Preferred Stock
(the "Preferred Stock") at a price of $15 per one one-hundredth
(1/100) of a share ("Exercise Price"). The description and terms of
the Rights are set forth in a Rights Agreement, dated as of May 19,
1995, as hereafter amended from time to time (the "Rights Agreement"),
between the Company and Chemical Mellon Shareholder Services L.L.C.,
as Rights Agent (the "Rights Agent").
As discussed below, initially the Rights will not be
----------------------------------------------------
exercisable, certificates will not be sent to stockholders and the
------------------------------------------------------------------
Rights will automatically trade with the Common Stock.
------------------------------------------------------
The Rights, unless earlier redeemed by the Board of
Directors, become exercisable upon the close of business on the day
(the "Distribution Date") which is the earlier of (i) the tenth day
following a public announcement that a person or group of affiliated
or associated persons, with certain exceptions set forth below, has
acquired beneficial ownership of 15% or more of the outstanding voting
stock of the Company (an "Acquiring Person") and (ii) the tenth
business day (or such later date as may be determined by the Board of
Directors prior to such time as any person or group of affiliated or
associated persons becomes an Acquiring Person) after the date of the
commencement or announcement of a person's or group's intention to
commence a tender or exchange offer the consummation of which would
result in the ownership of 30% or more of the Company's outstanding
voting stock (even if no shares are actually purchased pursuant to
such offer); prior thereto, the Rights would not be
NYFS02...:\09\78509\0002\1196\EXH4055C.34B
<PAGE>
<PAGE>
exercisable, would not be represented by a separate certificate, and
would not be transferable apart from the Company's Common Stock, but
will instead be evidenced, with respect to any of the Common Stock
certificates outstanding as of May 29, 1995, by such Common Stock
certificate with a copy of this Summary of Rights attached thereto.
An Acquiring Person does not include (A) the Company, (B) any
subsidiary of the Company, (C) any employee benefit plan or employee
stock plan of the Company or of any subsidiary of the Company, or any
trust or other entity organized, appointed, established or holding
Common Stock for or pursuant to the terms of any such plan or (D) any
person or group whose ownership of 15% or more of the shares of voting
stock of the Company then outstanding results solely from (i) any
action or transaction or transactions approved by the Board of
Directors before such person or group became an Acquiring Person or
(ii) a reduction in the number of issued and outstanding shares of
voting stock of the Company pursuant to a transaction or transactions
approved by the Board of Directors (provided that any person or group
that does not become an Acquiring Person by reason of clause (i) or
(ii) above shall become an Acquiring Person upon acquisition of an
additional 1% of the Company's voting stock unless such acquisition of
additional voting stock will not result in such person or group
becoming an Acquiring Person by reason of such clause (i) or (ii)).
Until the Distribution Date (or earlier redemption or
expiration of the Rights), new Common Stock certificates issued after
May 29, 1995 will contain a legend incorporating the Rights Agreement
by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any of the
Common Stock certificates outstanding as of May 29, 1995, with or
without a copy of this Summary of Rights attached thereto, will also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Stock
as of the close of business on the Distribution Date and such separate
certificates alone will evidence the Rights from and after the
Distribution Date.
The Rights are not exercisable until the Distribution Date.
The Rights will expire at the close of business on May 19, 2005,
unless earlier redeemed by the Company as described below.
The Preferred Stock is nonredeemable and, unless otherwise
provided in connection with the creation of a subsequent series of
preferred stock, subordinate to any other
<PAGE>
<PAGE>
series of the Company's preferred stock. The Preferred Stock may not
be issued except upon exercise of Rights. Each share of Preferred
Stock will be entitled to receive when, as and if declared, a
quarterly dividend in an amount equal to the greater of $1.00 per
share or 100 times the cash dividends declared on the Company's Common
Stock. In addition, the Preferred Stock is entitled to 100 times any
non-cash dividends (other than dividends payable in equity securities)
declared on the Common Stock, in like kind. In the event of the
liquidation of the Company, the holders of Preferred Stock will be
entitled to receive, for each share of Preferred Stock, a payment in
an amount equal to the greater of $1,500 or 100 times the payment made
per share of Common Stock. Each share of Preferred Stock will have
100 votes, voting together with the Common Stock. In the event of any
merger, consolidation or other transaction in which Common Stock is
exchanged, each share of Preferred Stock will be entitled to receive
100 times the amount received per share of Common Stock. The rights
of Preferred Stock as to dividends, liquidation and voting are
protected by anti-dilution provisions.
The number of shares of Preferred Stock issuable upon
exercise of the Rights is subject to certain adjustments from time to
time in the event of a stock dividend on, or a subdivision or
combination of, the Common Stock. The Exercise Price for the Rights
is subject to adjustment in the event of extraordinary distributions
of cash or other property to holders of Common Stock.
Unless the Rights are earlier redeemed or the transaction is
approved by the Board of Directors and the Continuing Directors, if
the Company at any time after the Distribution Date were to be
acquired in a merger or other business combination (in which any
shares of Common Stock are changed into or exchanged for other
securities or assets) or more than 50% of the assets or earning power
of the Company and its subsidiaries (taken as a whole) were to be sold
or transferred in one or a series of related transactions, the Rights
Agreement provides that proper provision will be made so that each
holder of record of a Right will from and after such date have the
right to receive, upon payment of the Exercise Price, that number of
shares of common stock of the acquiring company having a market value
at the time of such transaction equal to two times the Exercise Price.
In addition, unless the Rights are earlier redeemed, in the event that
a person or group becomes the beneficial owner of 15% or more of the
Company's voting stock (other than pursuant to a tender or exchange
offer (a "Qualifying Tender Offer") for all outstanding shares of
Common Stock that is
<PAGE>
<PAGE>
approved by the Board of Directors, after taking into account the
long-term value of the Company and all other factors they consider
relevant in the circumstances), the Rights Agreement provides that
proper provisions will be made so that each holder of record of a
Right, other than the Acquiring Person (whose Rights will thereupon
become null and void), will thereafter have the right to receive, upon
payment of the Exercise Price, that number of shares of the Preferred
Stock having a market value at the time of the transaction equal to
two times the Exercise Price (such market value to be determined with
reference to the market value of the Company's Common Stock as
provided in the Rights Agreement).
Fractions of shares of Preferred Stock (other than fractions
which are integral multiples of one one-hundredth of a share) may, at
the election of the Company, be evidenced by depositary receipts. The
Company may also issue cash in lieu of fractional shares which are not
integral multiples of one one-hundredth of a share.
At any time on or prior to the close of business on the
earlier of (i) the tenth day after the time that a person has become
an Acquiring Person (or such later date as a majority of the Board of
Directors and a majority of the Continuing Directors (as defined in
the Rights Agreement) may determine) or (ii) May 19, 2005, the Company
may redeem the Rights in whole, but not in part, at a price of $.001
per Right (the "Redemption Price"). The Rights may be redeemed after
the time that any Person has become an Acquiring Person only if
approved by a majority of the Continuing Directors. Immediately upon
the effective time of the action of the Board of Directors of the
Company authorizing redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
For as long as the Rights are then redeemable, the Company
may, except with respect to the redemption price or date of expiration
of the Rights, amend the Rights in any manner, including an amendment
to extend the time period in which the Rights may be redeemed. At any
time when the Rights are not then redeemable, the Company may amend
the Rights in any manner that does not materially adversely affect the
interests of holders of the Rights as such. Amendments to the Rights
Agreement from and after the time that any Person becomes an Acquiring
Person requires the approval of a majority of the Continuing Directors
(as provided in the Rights Agreement).
<PAGE>
<PAGE>
Until a Right is exercised, the holder, as such, will have
no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Current Report
on Form 8-K dated June 7, 1995. A copy of the Rights Agreement is
available free of charge from the Company. This summary description
of the Rights does not purport to be complete and is qualified in its
entirety by reference to the Rights Agreement which is incorporated in
this summary description herein by reference.
<PAGE>
<PAGE>
EXHIBIT B
[Form of Right Certificate]
Certificate No. W- Rights
------
NOT EXERCISABLE AFTER May 19, 2005 OR EARLIER IF REDEEMED.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY AND UNDER CERTAIN OTHER CIRCUMSTANCES, AT $.001 PER
RIGHT (SUBJECT TO ADJUSTMENT), ON THE TERMS SET FORTH OR
REFERRED TO IN THE RIGHTS AGREEMENT. UNDER CERTAIN
-------------
CIRCUMSTANCES AS PROVIDED IN THE RIGHTS AGREEMENT (AS REFERRED TO
-----------------------------------------------------------------
BELOW), RIGHTS ISSUED TO OR BENEFICIALLY OWNED BY ACQUIRING
-----------------------------------------------------------
PERSONS OR THEIR AFFILIATES OR ASSOCIATES (AS SUCH TERMS ARE
------------------------------------------------------------
DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH
-----------------------------------------------------------------
RIGHTS SHALL BE NULL AND VOID AND MAY NOT BE TRANSFERRED TO ANY
---------------------------------------------------------------
PERSON.
------
Right Certificate
U.S. BIOSCIENCE, INC.
This certifies that , or registered
assigns, is the registered owner of the number of Rights set forth
above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement dated as of May 19,
1995, as hereafter amended from time to time (the "Rights Agreement")
between U.S. Bioscience, Inc., a Delaware corporation (the "Company"),
and Chemical Mellon Shareholder Services L.L.C., a New Jersey Limited
Liability Company (the "Rights Agent"), to purchase from the Company
at any time after the Distribution Date (as such term is defined in
the Rights Agreement) and prior to 5:00 P.M. (Pennsylvania time) on
May 19, 2005 at the office of the Rights Agent designated in the
Rights Agreement for such purpose, or its successor as Rights
NYFS02...:\09\78509\0002\1196\EXH4055C.43A
<PAGE>
<PAGE>
Agent, in New York, New York, one one-hundredth (1/100) of a fully
paid nonassessable share of Series A Junior Preferred Stock (the
"Preferred Stock") of the Company at a purchase price of $15, as the
same may from time to time be adjusted in accordance with the Rights
Agreement (the "Exercise Price"), upon presentation and surrender of
this Right Certificate with the Form of Election to Purchase attached
hereto duly executed.
As provided in the Rights Agreement, the Exercise Price and
the number of shares of Preferred Stock which may be purchased upon
the exercise of the Rights evidenced by this Right Certificate are
subject to modification and adjustment upon the happening of certain
events and, upon the happening of certain events, securities other
than shares of Preferred Stock, or other property, may be acquired
upon exercise of the Rights evidenced by this Right Certificate, as
provided in the Rights Agreement.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are incorporated herein by reference and
made a part hereof and to which Rights Agreement reference is hereby
made for a full description of the rights, limitations of rights,
obligations, duties and immunities of the Rights Agent, the Company
and the holders of record of Right Certificates. Copies of the Rights
Agreement are on file at the principal executive office of the
Company.
<PAGE>
<PAGE>
This Right Certificate, with or without other Right
Certificates, upon surrender at the office of the Rights Agent
designated in the Rights Agreement for such purpose, may be exchanged
for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder of record to purchase a
like aggregate number of shares of Preferred Stock as the Rights
evidenced by the Right Certificate or Right Certificates surrendered
shall have entitled such holder to purchase. If this Right
Certificate shall be exercised in part, the holder shall be entitled
to receive upon surrender hereof, another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the Company at
its option or under certain other circumstances at a redemption price
of $.01 per Right.
No fractional shares of Preferred Stock (other than
fractions which are integral multiples of one one-hundredth (1/100) of
a share) are required to be issued upon the exercise of any Right or
Rights evidenced hereby, and in lieu thereof the Company may cause
depositary receipts to be issued and/or a cash payment may be made, as
provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any
<PAGE>
<PAGE>
purpose the holder of Preferred Stock or of any other securities of
the Company which may at any time be issuable on the exercise hereof,
nor shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the rights
of a stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at meeting
thereof, or to give or withhold consent to any corporate action or to
receive notice of meetings or other actions affecting stockholders
(except as provided in the Rights Agreement), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised as
provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights
Agent.
<PAGE>
<PAGE>
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal. Dated as of , 199 .
-------------- -
ATTEST: U.S. BIOSCIENCE, INC.
By
------------------------- ---------------------------------
Secretary Title:
Countersigned:
[Rights Agent]
By
-----------------------
Authorized Signature
<PAGE>
<PAGE>
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Right Certificates.)
FOR VALUE RECEIVED
-----------------------------------------
hereby sells, assigns and transfers unto
-----------------------------
(Please print name and address of transferee)-------------------------
----------------------------------------------------------------------
Rights evidenced by this Right Certificate, together with all right,
title and interest therein, and does hereby irrevocably constitute and
appoint
---------------------------------------------------------------
Attorney to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated: , 199
---------------- --
-----------------------------------
Signature
Signature Guaranteed:
<PAGE>
<PAGE>
Certificate
------------
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Right Certificate [ ] is [ ] is not being
sold, assigned or transferred by or on behalf of a Person who is or
was an Acquiring Person or an Associate or an Affiliate thereof (as
such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Right Certificate from any Person who is, was or
subsequently became an Acquiring Person or an Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement).
Dated: , 199
-------------- - -----------------------------------
Signature
NOTICE
------
The signature to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or
any change whatsoever.
<PAGE>
<PAGE>
FORM OF ELECTION TO PURCHASE
-----------------------------
(To be executed if registered holder
desires to exercise the Right Certificate.)
TO U.S. BIOSCIENCE, INC.:
The undersigned hereby irrevocably elects to exercise
Rights represented by this Right Certificate to
-----------------
purchase the shares of Preferred Stock issuable upon the exercise of
such Rights and requests that certificates for such share(s) be issued
in the following name:
Please insert social security
or other identifying number:
------------------------------------------
----------------------------------------------------------------------
(Please print name and address)
----------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining
of such Rights shall be registered in the name of and delivered to:
<PAGE>
<PAGE>
Please insert social security
or other identifying number:
------------------------------------------
----------------------------------------------------------------------
(Please print name and address)
----------------------------------------------------------------------
Dated: , 199
-------------- --
----------------------------------------
Signature
(Signature must conform in all
respects to name of holder as
specified on the fact of this
Right Certificate)
Signature Guaranteed:
<PAGE>
<PAGE>
EXHIBIT C
FORM OF
CERTIFICATE OF DESIGNATIONS
OF
SERIES A JUNIOR PREFERRED STOCK
OF
U.S. BIOSCIENCE, INC.
Pursuant to Section 151 of the Delaware
General Corporation Law
I, Robert I. Kriebel, Senior Vice President - Finance and
Administration and Treasurer of U.S. Bioscience, Inc., a corporation
organized and existing under the Delaware General Corporation Law (the
"Company"), in accordance with the provisions of Section 151 of such
law, DO HEREBY CERTIFY that pursuant to the authority conferred upon
the Board of Directors by the Restated Certificate of Incorporation of
the Company, the Board of Directors on May 19, 1995 adopted the
following resolution which creates a series of 500,000 shares of
Preferred Stock designated as Series A Junior Preferred Stock, as
follows:
RESOLVED, that pursuant to Section 151(g) of the Delaware
General Corporation Law and the authority vested in the Board of
Directors of the Company in accordance with the provisions of ARTICLE
FOUR of the Restated Certificate of Incorporation of the Company, a
series of Preferred Stock of the Company be, and hereby is, created,
and the powers, designations, preferences and relative, participating,
optional or other special rights of the shares of such series, and the
qualifications, limitations or restrictions thereof, be, and hereby
are, as follows:
NYFS02...:\09\78509\0002\1196\CRT4055C.55C
<PAGE>
<PAGE>
Section 1. Designation and Amount. The shares of such
----------------------
series shall be designated as "Series A Junior Preferred Stock" (the
"Series A Preferred Stock") and the number of shares constituting such
series shall be 500,000.
Section 2. Dividends and Distributions.
---------------------------
(A) Subject to the provisions for adjustment hereinafter
set forth, the holders of shares of Series A Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, (i) cash
dividends in an amount per share (rounded to the nearest cent) equal
to 100 times the aggregate per share amount of all cash dividends
declared or paid on the Common Stock, $0.005 par value per share, of
the Company (the "Common Stock") and (ii) a preferential cash dividend
(the "Preferential Dividends"), if any, in preference to the holders
of Common Stock, on the first day of February, May, August and
November of each year (each a "Quarterly Dividend Payment Date"), com-
mencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A Preferred
Stock, payable in an amount (except in the case of the first Quarterly
Dividend Payment if the date of the first issuance of Series A
Preferred Stock is a date other than a Quarterly Dividend Payment
date, in which case such payment shall be a prorated amount of such
amount) equal to $1.00 per share of
<PAGE>
<PAGE>
Series A Preferred Stock less the per share amount of all cash
dividends declared on the Series A Preferred Stock pursuant to clause
(i) of this sentence since the immediately preceding Quarterly
Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a
share of Series A Preferred Stock. In the event the Company shall, at
any time after the issuance of any share or fraction of a share of
Series A Preferred Stock, make any distribution on the shares of
Common Stock of the Company, whether by way of a dividend or a
reclassification of stock, a recapitalization, reorganization or
partial liquidation of the Company or otherwise, which is payable in
cash or any debt security, debt instrument, real or personal property
or any other property (other than cash dividends subject to the imme-
diately preceding sentence, a distribution of shares of Common Stock
or other capital stock of the Company or a distribution of rights or
warrants to acquire any such share, including any debt security
convertible into or exchangeable for any such share, at a price less
than the Fair Market Value (as hereinafter defined) of such share),
then, and in each such event, the Company shall simultaneously pay on
each then outstanding share of Series A Preferred Stock of the Company
a distribution, in like kind, of 100 times such distribution paid on a
share of Common Stock (subject to the provisions for adjustment
hereinafter set forth).
<PAGE>
<PAGE>
The dividends and distributions on the Series A Preferred Stock to
which holders thereof are entitled pursuant to clause (i) of the first
sentence of this paragraph and pursuant to the second sentence of this
paragraph are hereinafter referred to as "Dividends" and the multiple
of such cash and non-cash dividends on the Common Stock applicable to
the determination of the Dividends, which shall be 100 initially but
shall be adjusted from time to time as hereinafter provided, is
hereinafter referred to as the "Dividend Multiple". In the event the
Company shall at any time after May 29, 1995 declare or pay any divi-
dend or make any distribution on Common Stock payable in shares of
Common Stock, or effect a subdivision or split or a combination,
consolidation or reverse split of the outstanding shares of Common
Stock into a greater or lesser number of shares of Common Stock, then
in each such case the Dividend Multiple thereafter applicable to the
determination of the amount of Dividends which holders of shares of
Series A Preferred Stock shall be entitled to receive shall be the
Dividend Multiple applicable immediately prior to such event
multiplied by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
<PAGE>
<PAGE>
(B) The Company shall declare each Dividend at the same
time it declares any cash or non-cash dividend or distribution on the
Common Stock in respect of which a Dividend is required to be paid.
No cash or non-cash dividend or distribution on the Common Stock in
respect of which a Dividend is required to be paid shall be paid or
set aside for payment on the Common Stock unless a Dividend in respect
of such dividend or distribution on the Common Stock shall be simul-
taneously paid, or set aside for payment, on the Series A Preferred
Stock.
(C) Preferential Dividends shall begin to accrue on
outstanding shares of Series A Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issuance of any
shares of Series A Preferred Stock. Accrued but unpaid Preferential
Dividends shall cumulate but shall not bear interest. Preferential
Dividends paid on the shares of Series A Preferred Stock in an amount
less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding.
Section 3. Voting Rights. The holders of shares of Series
-------------
A Preferred Stock shall have the following voting rights:
(A) Subject to the provisions for adjustment hereinafter
set forth, each share of Series A Preferred Stock shall entitle the
holder thereof to 100 votes on all matters submitted
<PAGE>
<PAGE>
to a vote of the holders of the Common Stock. The number of votes
which a holder of Series A Preferred Stock is entitled to cast, as the
same may be adjusted from time to time as hereinafter provided, is
hereinafter referred to as the "Vote Multiple". In the event the
Company shall at any time after May 29, 1995 declare or pay any
dividend on Common Stock payable in shares of Common Stock, or effect
a subdivision or split or a combination, consolidation or reverse
split of the outstanding shares of Common Stock into a greater or
lesser number of shares of Common Stock, then in each such case the
Vote Multiple thereafter applicable to the determination of the number
of votes per share to which holders of shares of Series A Preferred
Stock shall be entitled after such event shall be the Vote Multiple
immediately prior to such event multiplied by a fraction the numerator
of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately
prior to such event.
(B) Except as otherwise provided herein, in the Restated
Certificate of Incorporation or By-laws, the holders of shares of
Series A Preferred Stock and the holders of shares of Common Stock
shall vote together as one class on all matters submitted to a vote of
stockholders of the Company.
<PAGE>
<PAGE>
(C) In the event that the Preferential Dividends accrued on
the Series A Preferred Stock for four or more quarterly dividend
periods, whether consecutive or not, shall not have been declared and
paid or irrevocably set aside for payment, the holders of record of
Preferred Stock of the Company of all series (including the Series A
Preferred Stock), other than any series in respect of which such right
is expressly withheld by the Restated Certificate of Incorporation or
the authorizing resolutions included in any Certificate of Desig-
nations therefor, shall have the right, at the next meeting of stock-
holders called for the election of directors, to elect two members to
the Board of Directors, which directors shall be in addition to the
number required by the By-laws prior to such event, to serve until the
next Annual Meeting and until their successors are elected and
qualified or their earlier resignation, removal or incapacity or until
such earlier time as all accrued and unpaid Preferential Dividends
upon the outstanding shares of Series A Preferred Stock shall have
been paid (or irrevocably set aside for payment) in full. The holders
of shares of Series A Preferred Stock shall continue to have the right
to elect directors as provided by the immediately preceding sentence
until all accrued and unpaid Preferential Dividends upon the out-
standing shares of Series A Preferred Stock shall have been paid (or
set aside for payment) in full. Such directors may be removed and
replaced by such
<PAGE>
<PAGE>
stockholders, and vacancies in such directorships may be filled only
by such stockholders (or by the remaining director elected by such
stockholders, if there be one) in the manner permitted by law;
provided, however, that any such action by stockholders shall be taken
at a meeting of stockholders and shall not be taken by written consent
thereto.
(D) Except as otherwise required by the Certificate of
Incorporation or By-laws or set forth herein, holders of Series A
Preferred Stock shall have no other special voting rights and their
consent shall not be required (except to the extent they are entitled
to vote with holders of Common Stock as set forth herein) for the
taking of any corporate action.
Section 4. Certain Restrictions.
--------------------
(A) Whenever Preferential Dividends or Dividends are in
arrears or the Company shall be in default of payment thereof,
thereafter and until all accrued and unpaid Preferential Dividends and
Dividends, whether or not declared, on shares of Series A Preferred
Stock outstanding shall have been paid or set irrevocably aside for
payment in full, and in addition to any and all other rights which any
holder of shares of Series A Preferred Stock may have in such
circumstances, the Company shall not
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration, any shares of stock ranking junior
<PAGE>
<PAGE>
(either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity as to
dividends with the Series A Preferred Stock, unless dividends are
paid ratably on the Series A Preferred Stock and all such parity
stock on which dividends are payable or in arrears in proportion
to the total amounts to which the holders of all such shares are
then entitled if the full dividends accrued thereon were to be
paid;
(iii) except as permitted by subparagraph (iv) of this
paragraph 4(A), redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with
the Series A Preferred Stock, provided that the Company may at
any time redeem, purchase or otherwise acquire shares of any such
parity stock in exchange for shares of any stock of the Company
ranking junior (both as to dividends and upon liquidation,
dissolution or winding up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock
ranking on a parity with the Series A Preferred Stock (either as
to dividends or upon liquidation, dissolution or
<PAGE>
<PAGE>
winding up), except in accordance with a purchase offer made to
all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend
rates and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result in
fair and equitable treatment among the respective series or
classes.
(B) The Company shall not permit any Subsidiary (as
hereinafter defined) of the Company to purchase or otherwise acquire
for consideration any shares of stock of the Company unless the
Company could, under paragraph (A) of this Section 4, purchase or
otherwise acquire such shares at such time and in such manner. A
"Subsidiary" of the Company shall mean any corporation or other entity
of which securities or other ownership interests having ordinary
voting power sufficient to elect a majority of the board of directors
of such corporation or other entity or other persons performing
similar functions are beneficially owned, directly or indirectly, by
the Company or by any corporation or other entity that is otherwise
controlled by the Company.
(C) The Company shall not issue any shares of Series A
Preferred Stock except upon exercise of Rights issued pursuant to that
certain Rights Agreement dated as of May 19, 1995 between the Company
and Chemical Mellon Shareholder Services L.L.C., as
<PAGE>
<PAGE>
Rights Agent, a copy of which is on file with the Secretary of the
Company at its principal executive office and shall be made available
to stockholders of record without charge upon written request therefor
addressed to said Secretary. Notwithstanding the foregoing sentence,
nothing contained in the provisions hereof shall prohibit or restrict
the Company from issuing for any purpose any series of Preferred Stock
with rights and privileges similar to, different from, or greater
than, those of the Series A Preferred Stock.
Section 5. Reacquired Shares. Any shares of Series A
-----------------
Preferred Stock purchased or otherwise acquired by the Company in any
manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares upon their retirement and
cancellation shall become authorized but unissued shares of Preferred
Stock, without designation as to series, and such shares may be
reissued as part of a new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors.
Section 6. Liquidation, Dissolution or Winding Up. Upon
--------------------------------------
any voluntary or involuntary liquidation, dissolution or winding up of
the Company, no distribution shall be made (i) to the holders of
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock unless the holders of shares of Series A
<PAGE>
<PAGE>
Preferred Stock shall have received for each share of Series A
Preferred Stock, subject to adjustment as hereinafter provided, (A)
$1,500 plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such
payment or, (B) if greater than the amount specified in clause (i)(A)
of this sentence, an amount equal to 100 times the aggregate amount to
be distributed per share to holders of Common Stock, as the same may
be adjusted as hereinafter provided and (ii) to the holders of stock
ranking on a parity upon liquidation, dissolution or winding up with
the Series A Preferred Stock, unless simultaneously therewith
distributions are made ratably on the Series A Preferred Stock and all
other shares of such parity stock in proportion to the total amounts
to which the holders of shares of Series A Preferred Stock are
entitled under clause (i)(A) of this sentence and to which the holders
of such parity shares are entitled, in each case upon such liquida-
tion, dissolution or winding up. The amount to which holders of
Series A Preferred Stock may be entitled upon liquidation, dissolution
or winding up of the Company pursuant to clause (i)(B) of the
foregoing sentence is hereinafter referred to as the "Participating
Liquidation Amount" and the multiple of the amount to be distributed
to holders of shares of Common Stock upon the liquidation, dissolution
or winding up of the Company applicable pursuant to said clause to the
determination of the Participating
<PAGE>
<PAGE>
Liquidation Amount, as said multiple may be adjusted from time to time
as hereinafter provided, is hereinafter referred to as the
"Liquidation Multiple". In the event the Company shall at any time
after May 29, 1995 declare or pay any dividend on Common Stock payable
in shares of Common Stock, or effect a subdivision or split or a com-
bination, consolidation or reverse split of the outstanding shares of
Common Stock into a greater or lesser number of shares of Common
Stock, then, in each such case, the Liquidation Multiple thereafter
applicable to the determination of the Participating Liquidation
Amount to which holders of Series A Preferred Stock shall be entitled
after such event shall be the Liquidation Multiple applicable
immediately prior to such event multiplied by a fraction the numerator
of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 7. Certain Reclassifications and Other Events.
------------------------------------------
(A) In the event that holders of shares of Common Stock of
the Company receive after May 29, 1995 in respect of their shares of
Common Stock any share of capital stock of the Company (other than any
share of Common Stock of the Company), whether by way of reclassi-
fication, recapitalization, reorganization, dividend or other
distribution or otherwise (a "Trans
<PAGE>
<PAGE>
action"), then, and in each such event, the dividend rights, voting
rights and rights upon the liquidation, dissolution or winding up of
the Company of the shares of Series A Preferred Stock shall be
adjusted so that after such event the holders of Series A Preferred
Stock shall be entitled, in respect of each share of Series A
Preferred Stock held, in addition to such rights in respect thereof to
which such holder was entitled immediately prior to such adjustment,
to (i) such additional dividends as equal the Dividend Multiple in
effect immediately prior to such Transaction multiplied by the
additional dividends which the holder of a share of Common Stock shall
be entitled to receive by virtue of the receipt in the Transaction of
such capital stock, (ii) such additional voting rights as equal the
Vote Multiple in effect immediately prior to such Transaction
multiplied by the additional voting rights which the holder of a share
of Common Stock shall be entitled to receive by virtue of the receipt
in the Transaction of such capital stock and (iii) such additional
distributions upon liquidation, dissolution or winding up of the
Company as equal the Liquidation Multiple in effect immediately prior
to such Transaction multiplied by the additional amount which the
holder of a share of Common Stock shall be entitled to receive upon
liquidation, dissolution or winding up of the Company by virtue of the
receipt in the
<PAGE>
<PAGE>
Transaction of such capital stock, as the case may be, all as provided
by the terms of such capital stock.
(B) In the event that holders of shares of Common Stock of
the Company receive after May 29, 1995 in respect of their shares of
Common Stock any right or warrant to purchase Common Stock (including
as such a right, for all purposes of this paragraph, any security con-
vertible into or exchangeable for Common Stock) at a purchase price
per share less than the Fair Market Value of a share of Common Stock
on the date of issuance of such right or warrant, then and in each
such event the dividend rights, voting rights and rights upon the
liquidation, dissolution or winding up of the Company of the shares of
Series A Preferred Stock shall each be adjusted so that after such
event the Dividend Multiple, the Vote Multiple and the Liquidation
Multiple shall each be the product of the Dividend Multiple, the Vote
Multiple and the Liquidation Multiple, as the case may be, in effect
immediately prior to such event multiplied by a fraction the numerator
of which shall be the number of shares of Common Stock outstanding
immediately before such issuance of rights or warrants plus the
maximum number of shares of Common Stock which could be acquired upon
exercise in full of all such rights or warrants and the denominator of
which shall be the number of shares of Common Stock outstanding
immediately before such issuance of rights or warrants plus the number
of shares of
<PAGE>
<PAGE>
Common Stock which could be purchased, at the Fair Market Value of the
Common Stock at the time of such issuance, by the maximum aggregate
consideration payable upon exercise in full of all such rights or
warrants.
(C) In the event that holders of shares of Common Stock of
the Company receive after May 29, 1995 in respect of their shares of
Common Stock any right or warrant to purchase capital stock of the
Company (other than shares of Common Stock), including as such a
right, for all purposes of this paragraph, any security convertible
into or exchangeable for capital stock of the Company (other than
Common Stock), at a purchase price per share less than the Fair Market
Value of such shares of capital stock on the date of issuance of such
right or warrant, then and in each such event the dividend rights,
voting rights and rights upon liquidation, dissolution or winding up
of the Company of the shares of Series A Preferred Stock shall each be
adjusted so that after such event each holder of a share of Series A
Preferred Stock shall be entitled, in respect of each share of Series
A Preferred Stock held, in addition to such rights in respect thereof
to which such holder was entitled immediately prior to such event, to
receive (i) such additional dividends as equal the Dividend Multiple
in effect immediately prior to such event multiplied, first, by the
additional dividends to which the holder of a share of Common Stock
shall be entitled upon exercise
<PAGE>
<PAGE>
of such right or warrant by virtue of the capital stock which could be
acquired upon such exercise and multiplied again by the Discount
Fraction (as hereinafter defined) and (ii) such additional voting
rights as equal the Vote Multiple in effect immediately prior to such
event multiplied, first, by the additional voting rights to which the
holder of a share of Common Stock shall be entitled upon exercise of
such right or warrant by virtue of the capital stock which could be
acquired upon such exercise and multiplied again by the Discount
Fraction and (iii) such additional distributions upon liquidation,
dissolution or winding up of the Company as equal the Liquidation
Multiple in effect immediately prior to such event multiplied, first,
by the additional amount which the holder of a share of Common Stock
shall be entitled to receive upon liquidation, dissolution or winding
up of the Company upon exercise of such right or warrant by virtue of
the capital stock which could be acquired upon such exercise and
multiplied again by the Discount Fraction. For purposes of this
paragraph, the "Discount Fraction" shall be a fraction the numerator
of which shall be the difference between the Fair Market Value of a
share of the capital stock subject to a right or warrant distributed
to holders of shares of Common Stock of the Company as contemplated by
this paragraph immediately after the distribution thereof and the
purchase price per share for such share of capital stock pursuant to
such right or
<PAGE>
<PAGE>
warrant and the denominator of which shall be the Fair Market Value of
a share of such capital stock immediately after the distribution of
such right or warrant.
(D) For purposes of this Certificate of Designations, the
"Fair Market Value" of a share of capital stock of the Company (in-
cluding a share of Common Stock) on any date shall be deemed to be the
average of the daily closing price per share thereof over the 30
consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; provided, however, that, in the event
that such Fair Market Value of any such share of capital stock is
determined during a period which includes any date that is within 30
Trading Days after (i) the ex-dividend date for a dividend or distri-
bution on stock payable in shares of such stock or securities
convertible into shares of such stock, or (ii) the effective date of
any subdivision, split, combination, consolidation, reverse stock
split or reclassification of such stock, then, and in each such case,
the Fair Market Value shall be appropriately adjusted by the Board of
Directors of the Company to take into account ex-dividend or post-
effective date trading. The closing price for any day shall be the
last sale price, regular way, or, in case, no such sale takes place on
such day, the average of the closing bid and asked prices, regular way
(in either case, as reported in the applicable transaction reporting
system with respect to securities listed or
<PAGE>
<PAGE>
admitted to trading on the New York Stock Exchange), or, if the shares
are not listed or admitted to trading on the New York Stock Exchange,
as reported in the applicable transaction reporting system with
respect to securities listed on the principal national securities
exchange on which the shares are listed or admitted to trading or, if
the shares are not listed or admitted to trading on any national secu-
rities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers,
Inc. Automated Quotation System ("NASDAQ") or such other system then
in use, or if on any such date the shares are not quoted by any such
organization, the average of the closing bid and asked prices as furn-
ished by a professional market maker making a market in the shares
selected by the Board of Directors of the Company. The term "Trading
Day" shall mean a day on which the principal national securities
exchange on which the shares are listed or admitted to trading is open
for the transaction of business or, if the shares are not listed or
admitted to trading on any national securities exchange, on which the
New York Stock Exchange or such other national securities exchange as
may be selected by the Board of Directors of the Company is open. If
the shares are not publicly held or not so listed or traded on any day
within the period of 30 Trading Days applicable to the
<PAGE>
<PAGE>
determination of Fair Market Value thereof as aforesaid, "Fair Market
Value" shall mean the fair market value thereof per share as
determined in good faith by the Board of Directors of the Company. In
either case referred to in the foregoing sentence, the determination
of Fair Market Value shall be described in a statement filed with the
Secretary of the Company.
Section 8. Consolidation, Merger, etc. In case the Company
---------------------------
shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other
property, then in any such case each outstanding share of Series A
Preferred Stock shall at the same time be similarly exchanged for or
changed into the aggregate amount of stock, securities, cash and/or
other property (payable in like kind), as the case may be, for which
or into which each share of Common Stock is changed or exchanged
multiplied by the highest of the Vote Multiple, the Dividend Multiple
or the Liquidation Multiple in effect immediately prior to such event.
Section 9. Effective Time of Adjustments.
-----------------------------
(A) Adjustments to the Series A Preferred Stock required by
the provisions hereof shall be effective as of the time at which the
event requiring such adjustments occurs.
(B) The Company shall give prompt written notice to each
holder of a share of Series A Preferred Stock of the effect
<PAGE>
<PAGE>
of any adjustment to the voting rights, dividend rights or rights upon
liquidation, dissolution or winding up of the Company of such shares
required by the provisions hereof. Notwithstanding the foregoing
sentence, the failure of the Company to give such notice shall not
affect the validity of or the force or effect of or the requirement
for such adjustment.
Section 10. No Redemption. The shares of Series A
-------------
Preferred Stock shall not be redeemable at the option of the Company
or any holder thereof. Notwithstanding the foregoing sentence of this
Section, the Company may acquire shares of Series A Preferred Stock in
any other manner permitted by law, the provisions hereof and the
Restated Certificate of Incorporation of the Company.
Section 11. Ranking. Unless otherwise provided in the
-------
Certificate of Incorporation of the Company or a Certificate of
Designations relating to a subsequent series of preferred stock of the
Company, the Series A Preferred Stock shall rank junior to all other
series of the Company's preferred stock as to the payment of dividends
and the distribution of assets on liquidation, dissolution or winding
up and senior to the Common Stock.
Section 12. Amendment. The provisions hereof and the
---------
Certificate of Incorporation of the Company shall not be amended in
any manner which would adversely affect the rights, privileges or
powers of the Series A Preferred Stock without, in addition to
<PAGE>
<PAGE>
any other vote of stockholders required by law, the affirmative vote
of the holders of two-thirds or more of the outstanding shares of
Series A Preferred Stock, voting together as a single class.
IN WITNESS WHEREOF, I have executed and subscribed this
Certificate of Designations and do affirm the foregoing as true under
the penalties of perjury this day of June, 1995.
----
-------------------------
Robert I. Kriebel
Senior Vice President -
Finance and Administration
and Treasurer
ATTEST:
--------------------------
<PAGE>
US
NEWS BIOSCIENCE
One Tower Bridge
100 Front Street
West Conshohocken, PA 19428
Contact: Robert I. Kriebel, Sr. Vice President
Finance and Administration
U.S. Bioscience
(610) 832-0570
FOR IMMEDIATE RELEASE
---------------------
U.S. BIOSCIENCE, INC. BOARD ADOPTS RIGHTS PLAN
WEST CONSHOHOCKEN, PA, MAY 19, 1995 -- U.S. BIOSCIENCE, INC. (AMEX:UBS)
announced today that its Board of Directors has adopted a Rights Plan
designed to protect company stockholders in the event of takeover
action that would deny them the full value of their investment.
Terms of the rights plan provide for a dividend distribution of one
right for each share of Common Stock of U.S. Bioscience, Inc. to
holders of record at the close of business on May 29, 1995. The
rights will become exercisable only in the event, with certain
exceptions, an aquiring party accumulates 15 percent or more of U.S.
Bioscience's voting stock, or if a party announces an offer to aquire
30 percent or more. The rights will expire on May 29, 2005. Each right
will entitle the holder to buy one one-hundreth of a share of a new series
of preferred stock at a price of $15. In addition, upon the occurence
of certain events, holders of the rights will be entitled to purchase
either U.S. Bioscience stock or shares in an "acquiring entity" at
half of market value.
U.S. Bioscience will generally be entitled to redeem the rights at one-
tenth of one cent ($.001) per right at any time until the tenth day
following the acquisition of a 15 percent position in its voting stock.
Details of the new Rights Plan will be outlined in a letter to be mailed
to stockholders.
Based in West Conshohocken, Pennsylvania, U.S. Bioscience is a
pharmaceutical company specializing in the development and
commercialization of products for patients with cancer and AIDS.
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